-Caveat Lector- from: http://www.webcom.com/pinknoiz/covert/contracoke.html <A HREF="http://www.webcom.com/pinknoiz/covert/contracoke.html">Nicaraguan Contras and Cocaine</A> ----- See also CIABASE and more Iran/contra information Selections from the Senate Committee Report on Drugs, Law Enforcement and Foreign Policy chaired by Senator John F. Kerry •I. INTRODUCTION •II. THE EXECUTIVE BRANCH RESPONSE TO CONTRA/DRUG CHARGES •III. THE GUNS AND DRUG SMUGGLING INFRASTRUCTURE DEVELOPS •IV. DRUG TRAFFICKING AND THE COVERT WAR •V. THE PILOTS •VI. U.S. GOVERNMENT FUNDS AND COMPANIES WITH DRUG CONNECTIONS •A. SETCO/HONDU CARIB •B. FRIGORIFICOS DE PUNTARENAS •C. DIACSA •D. VORTEX •VII. THE CASE OF GEORGE MORALES AND FRS/ARDE •VIII. JOHN HULL •IX. THE SAN FRANCISCO FROGMAN CASE, UND-FARN AND PCNE •X. THE CUBAN-AMERICAN CONNECTION •XI. RAMON MILIAN RODRIGUEZ AND FELIX RODRIGUEZ •FOOTNOTES NARCOTICS TRAFFICKERS AND THE CONTRAS I. INTRODUCTION The initial Committee investigation into the international drug trade, which began in April, 1986, focused on allegations that Senator John F. Kerry had received of illegal gun-running and narcotics trafficking associated with the Contra war against Nicaragua. As the Committee proceeded with its investigation, significant information began surfacing concerning the operations of international narcotics traffickers, particularly relating to the Colombian-based cocaine cartels. As a result, the decision was made to incorporate the Contra-related allegations into a broader investigation concerning the relationship between foreign policy, narcotics trafficking and law enforcement. While the contra/drug question was not the primary focus of the investigation, the Subcommittee uncovered considerable evidence relating to the Contra network which substantiated many of the initial allegations laid out before the Committee in the Spring of 1986. On the basis of this evidence, it is clear that individuals who provided support for the Contras were involved in drug trafficking, the supply network of the Contras was used by drug trafficking organizations, and elements of the Contras themselves knowingly received financial and material assistance from drug traffickers. In each case, one or another agency of the U.S. government had information regarding the involvement either while it was occurring, or immediately thereafter. The Subcommittee found that the Contra drug links included: --Involvement in narcotics trafficking by individuals associated with the Contra movement. --Participation of narcotics traffickers in Contra supply operations through business relationships with Contra organizations. --Provision of assistance to the Contras by narcotics traffickers, including cash, weapons, planes, pilots, air supply services and other materials, on a voluntary basis by the traffickers. --Payments to drug traffickers by the U.S. State Department of funds authorized by the Congress for humanitarian assistance to the Contras, in some cases after the traffickers had been indicted by federal law enforcement agencies on drug charges, in others while traffickers were under active investigation by these same agencies. These activities were carried out in connection with Contra activities in both Costa Rica and Honduras. The Subcommittee found that the links that were forged between the Contras and the drug traffickers were primarily pragmatic, rather than ideological. The drug traffickers, who had significant financial and material resources, needed the cover of legitimate activity for their criminal enterprises. A trafficker like George Morales hoped to have his drug indictment dropped in return for his financial and material support of the Contras. Others, in the words of Marcos Aguado, Eden Pastora's air force chief: ... took advantage of the anti-communist sentiment which existed in Central America ... and they undoubtedly used it for drug trafficking. [1] While for some Contras, it was a matter of survival, for the traffickers it was just another business deal to promote and protect their own operations. II. THE EXECUTIVE BRANCH RESPONSE TO CONTRA/DRUG CHARGES In the wake of press accounts concerning links between the Contras and drug traffickers' beginning December, 1985 with a story by the Associated Press, both Houses of the Congress began to raise questions about the drug-related allegations associated with the Contras, causing a review in the spring of 1986 of the allegations by the State Department, in conjunction with the Justice Department and relevant U.S. intelligence agencies. Following that review, the State Department told the Congress in April, 1986 that it had at that time "evidence of a limited number of incidents in which known drug traffickers tried to establish connections with Nicaraguan resistance groups." According to the Department, "... these attempts for the most part took place during the period when the resistance was receiving no U.S. funding and was particularly hard pressed for financial support." The report acknowledged that, "... drug traffickers were attempting to exploit the desperate conditions," in which the Contras found themselves.[2] The Department had suggested that while "individual members" of the Contra movement might have been involved, their drug trafficking was "... without the authorization of resistance leaders." [3] Following further press reports linking contra supply operations to narcotics, and inquiries from the Foreign Relations Committee to the State Department concerning these links, the State Department issued a second statement to the Congress concerning the allegations on July 24, 1986. In this report, the State Department said, "... the available evidence points to involvement with drug traffickers by a limited number of persons having various kinds of affiliations with, or political sympathies for, the resistance groups."[4] A year later, in August 1987, the CIA's Central American Task Force Chief became the first U.S. official to revise that assessment to suggest instead that the links between Contras on the Southern Front in Costa Rica to narcotics trafficking was in fact far broader than that acknowledged by the State Department in 1986. Appearing before the Iran-Contra Committees' the CIA Central American Task Force chief testified:With respect to (drug trafficking by) the Resistance Forces ... it is not a couple of people. It is a lot of people.[5] The CIA's Chief of the Central American Task Force went on to say: We knew that everybody around Pastora was involved in cocaine ... His staff and friends (redacted) they were drug smugglers or involved in drug smuggling.[6] The Justice Department was slow to respond to the allegations regarding links between drug traffickers and the Contras. In the spring of 1986, even after the State Department was acknowledging there were problems with drug trafficking in association with Contra activities on the Southern Front, the Justice Department was adamantly denying that there was any substance to the narcotics allegations. At the time, the FBI had significant information regarding the involvement of narcotics traffickers in Contra operations and Neutrality Act violations.[7] The failure of U.S. law enforcement and intelligence agencies to respond properly to allegations concerning criminal activity relating to the Contras was demonstrated by the handling of the Committee's own investigation by the Justice Department and the CIA in the spring of 1986. On May 6, 1986, a bipartisan group of Committee staff met with representatives of the Justice Department, FBI, DEA, CIA and State Department to discuss the allegations that Senator Kerry had received information of Neutrality Act violations, gun running and drug trafficking in association with Contra organizations based on the Southern Front in Costa Rica. In the days leading up to the meeting, Justice Department spokesmen were stating publicly that "the FBI had conducted an inquiry into all of these charges and none of them have any substance."[8] At that meeting, Justice Department officials privately contradicted the numerous public statements from the Department that these allegations had been investigated thoroughly and were determined to be without foundation. The Justice Department officials at the meeting said the public statements by Justice were "inaccurate."[9] The Justice officials confirmed there were ongoing Neutrality Act investigations in connection with the allegations raised by Senator Kerry. At the same meeting, representatives of the CIA categorically denied that the Neutrality Act violations raised by the Committee staff had in fact taken place, citing classified documents which the CIA did not make available to the Committee. In fact, at the time, the FBI had already assembled substantial information confirming the Neutrality Act violations, including admissions by some of the persons involved indicating that crimes had taken place. [10] In August 1986, Senator Richard Lugar, then-Chairman of the Committee and the ranking member, Senator Claiborne Pell, wrote the Justice Department requesting information on 27 individuals and organizations associated with the contras concerning allegations of their involvement in narcotics trafficking and illegal gunrunning. The Justice Department refused to provide any information in response to this request, on the grounds that the information remained under active investigation, and that the Committee's "rambling through open investigations gravely risks compromising those efforts."[11] On October 5, 1988, the Subcommittee received sworn testimony from the Miami prosecutor handling the Neutrality and gun-running cases that he had been advised that some officials in the Justice Department had met in 1986 to discuss how "to undermine" Senator Kerry's attempts to have hearings regarding the allegations.[12] The Subcommittee took a number of depositions of Justice Department personnel involved in responding to the Committee investigation or in prosecuting allegations stemming from the Committee's investigation. Each denied participating in any agreement to obstruct or interfere with a Congressional investigation. In order to place in their proper perspective the attempts to interfere with' or undermine, the Committee investigation, a lengthy chronology has been prepared which appears at appendix A of this report. III. THE GUNS AND DRUG SMUGGLING INFRASTRUCTURE DEVELOPS Covert war, insurgency and drug trafficking frequently go hand-in-hand without regard to ideology or sponsorship. General Paul Gorman, testified that the use of narcotics profits by armed resistance groups was commonplace. Gorman stated further that: "If you want to move arms or munitions in Latin America, the established networks are owned by the cartels. It has lent itself to the purposes of terrorists, of saboteurs, of spies, of insurgents and subversions."[13] DEA Assistant Administrator David Westrate said of the Nicaraguan war: It is true that people on both sides of the equation (in the Nicaraguan war) were drug traffickers, and a couple of them were pretty signficant. [14] Drug trafficking associated with revolution in Nicaragua began during the late 1970's with the Sandinistas attempt to overthrow the regime of Anastasio Somoza Debayle. At the time, the Sandinistas were supported by most governments in the region. Thosegovernments helped provide the FSLN with the money, weapons, and the sanctuary they needed to overthrow Somoza.[15] Costa Rica, which has dozens of unsupervised airstrips near the Nicaraguan border, became an important supply and staging area for the Sandinistas. These air strips were used by Noriega and others for shipments of weapons to the Sandinistas.[16] Former senior Costa Rican Law enforcement officials told the Subcommittee they were instructed to keep their narcotics investigators away from the Nicaraguan border during the Sandinista revolution. Even when they had received hard information about drugs on the aircraft delivering weapons, the officials, in effort to avoid controversy regarding the war, ignored the tips and let the flights go. [17] A number of Costa Ricans became suppliers for the Sandinistas. These included Jaime "Pillique" Guerra, who owned a crop dusting service and a related aircraft support business in northern Costa Rica. Guerra refueled and repaired the planes which came from Panama loaded with Cuban weapons for the Sandinistas.[18] Guerra's crop dusting business was excellent cover for the movement of aviation fuel to the dozens of remote airstrips they used without arousing the suspicions of Costa Rican authorities. When the Sandinista insurgency succeeded in 1979, smuggling activity in northern Costa Rica did not stop. Surplus weapons originally stored in Costa Rica for use by the Sandinistas were sold on the black market in the region.[19] Some of these weapons were shipped to the Salvadoran rebels from the same airstrips in the same planes, flown by the same pilots who had previously worked for the Sandinistas.[20] Costa Rican law enforcement authorities said that the drug trafficking through northern Costa Rica continued as well. They said that their police units lacked the men, the communications equipment and the transport to close down the airstrips and seize weapons and drugs.[21] Werner Lotz, a Costa Rican pilot serving sentence for drug smuggling, testified that there was little the Costa Rican government could do to deal with the continuing drug trafficking: "Costa Rica has got only civil guards, underpaid and easily bought ... To be very clear ... our guard down there is barefoot, and you're talking about 50 men to cover 400 kilometers maybe." [22] IV. DRUG TRAFFICKING AND THE COVERT WAR When the Southern Front against the Sandinista Government in Nicaragua was established in 1983, Costa Rica remained ill-equipped to deal with the threat posed by the Colombian drug cartels. Then, as now, the country does not have a military, its law enforcement resources remain limited, and its radar system still so poor that Contra supply planes could fly in and out of the clandestine strips without being detected. [23] Following their work on behalf of the Sandinistas and the Salvadoran rebels, the Colombian and Panamanian drug operatives were well positioned to exploit the infrastructure now serving and supplying the Contra Southern Front. This infrastructure was increasingly important to the drug traffickers, as this was the very period in which the cocaine trade to the U.S. from Latin America was growing exponentially. In the words of Karol Prado, an officer of the ARDE Contra organization of Eden Pastora on the Southern Front, "drug traffickers ... approaches political groups like ARDE trying to make deals that would somehow camouflage or cover up their activities." The head of the Costa Rican "air force" and personal pilot to two Costa Rican presidents, Werner Lotz, explained the involvement of drug traffickers with the Contras in the early days of the establishment of the Southern Front as a consequence of the Contras lack of resources: "There was no money. There were too many leaders and too few people to follow them, and everybody was trying to make money as best they could." [24] The logic of having drug money pay for the pressing needs of the Contras appealed to a number of people who became involved in the covert war. Indeed, senior U.S. policy makers were not immune to the idea that drug money was a perfect solution to the Contra's funding problems. As DEA officials testified last July before the House Judiciary Subcommittee on Crime, Lt. Col. Oliver North suggested to the DEA in June 1985 that $1.5 million in drug money carried aboard a plane piloted by DEA informant Barry Seal and generated in a sting of the Medellin Cartel and Sandinista officials, be provided to the Contras.[25] While the suggestion was rejected by the DEA, the fact that it was made highlights the potential appeal of drug profits for persons engaged in covert activity. Lotz said that Contra operations on the Southern Front were in fact funded by drug operations. He testified that weapons for the Contras came from Panama on small planes carrying mixed loads which included drugs. The pilots unloaded the weapons, refueled, and headed north toward the U.S. with drugs.[26] The pilots included Americans, Panamanians, and Colombians, and occasionally, uniformed members of the Panamanian Defense Forces.[27] Drugpilots soon began to use the Contra airstrips to refuel even when there were no weapons to unload. They knew that the authorities would not check the airstrips because the war was "protected".[28] The problem of drug traffickers using the airstrips also used to supply the Contras persisted through 1985 and 1986. By the summer of 1986, it became of significant concern to the U.S. Government officials who were involved in the covert Contra supply operations undertaken during the Boland Amendment period. As then-CIA Station Chief, "Thomas Castillo" testified to the Iran/Contra Committees, U.S. Ambassador to Costa Rica Lewis Tambs wanted to place guards on the secret Contra supply airstrip at Santa Elena in Costa Rica, to avoid: having drug traffickers use that site, and this was a continuing concern during the period of June, July and August.[29] The concern highlights the degree to which the infrastructure used by the Contras and that used by drug traffickers was potentially interchangeable, even in a situation in which the U.S. government had itself established and maintained the airstrip involved. V. THE PILOTS Pilots who made combined Contra weapons/drug flights through the Southern Front included: --Gerardo Duran, a Costa Rican pilot in the airplane parts supply business. Duran flew for a variety of Contra organizations on the Southern Front' including those affiliated with Alfonso Robelo, Fernando"El Negro"Chamorro, and Eden Pastora, before U.S. officials insisted that the Contras sever their ties from Duran because of his involvement with drugs. [30] Duran was convicted of narcotics trafficking in Costa Rica in 1987 and jailed. --Gary Wayne Betzner, drug pilot who worked for convicted smuggler George Morales. Betzner testified that twice in 1984 he flew weapons for the Contras from the U.S. to northern Costa Rica and returned to the United States with loads of cocaine. Betzner is presently serving a lengthy prison term for drug smuggling.[31] --Jose"Chepon" Robelo, the head of UDN-FARN air force on the Southern front. Robelo turned to narcotics trafficking and reselling goods provided to the Contras by the U.S.[32] VI. U.S. GOVERNMENT FUNDS AND COMPANIES WITH DRUG CONNECTIONS The State Department selected four companies owned and operated by narcotics traffickers to supply humanitarian assistance to the Contras. The companies were:--SETCO Air, a company established by Honduran drug trafficker Ramon Matta Ballesteros; --DIACSA, a Miami-based air company operated as the headquarters of a drug trafficker enterprise for convicted drug traffickers Floyd Carlton and Alfredo Caballero; --Frigorificos de Puntarenas, a firm owned and operated by Cuban-American drug traffickers; --Vortex, an air service and supply company partly owned by admitted drug trafficker Michael Palmer. In each case, prior to the time that the State Department entered into contracts with the company, federal law enforcement had received information that the individuals controlling these companies were involved in narcotics. Officials at NHAO told GAO investigators that all the supply contractors were to have been screened by U.S. intelligence and law enforcement agencies prior to their receiving funds from State Department on behalf of the Contras to insure that they were not involved with criminal activity.[33] Neither the GAO nor the NHAO were certain whether or not that had actually been done.[34] The payments made by the State Department to these four companies between January and August 1986, were as follows: SETCO, for air transport service.......................$186,924.25 DIACSA, for airplane engine parts........................41,120.90 Frigorificos De Puntarenas, as a broker/supplier for various serv- ices to Contras on the Southern Front..................261,932.00 VORTEX, for air transport services......................317,425.17 Total [35] .............................................806,401.20 A number of questions arise as a result of the selection of these four companies by the State Department for the provision of humanitarian assistance to the contras, to which the Subcommittee has been unable to obtain clear answers: --Who selected these firms to provide services to the Contras, paid for with public funds, and what criteria were used for selecting them? --Were any U.S. officials in the CIA, NSC, or State Department aware of the narcotics allegations associated with any of these companies? If so, why were these firms permitted to receive public funds on behalf of the Contras? --Why were Contra suppliers not checked against federal law enforcement records that would have shown them to be either under active investigation as drug traffickers, or in the case of DIACSA, actually under indictment? Ambassador Robert Duemling, Director of the Nicaraguan Humanitarian Assistance Organization (NHAO), who was responsible for the operation of the program, was unable to recall how these companies were selected, when questioned by Senator Kerry in April, 1988.[36] Ambassador Duemling also could not recall whetheror not the contractors had in fact been checked against law enforcement records prior to receiving funds from the State Department. In previous testimony before the Iran/Contra Committees, Ambassador Duemling had recalled that NHAO had been directed by Lt. Col. Oliver North to continue "the existing arrangements of the resistance movement" in choosing contractors.[37] At best, these incidents represent negligence on the part of U.S. government officials responsible for providing support to the Contras. At worst it was a matter of turning a blind eye to the activities of companies who use legitimate activities as a cover for their narcotics trafficking. A. SETCO/HONDU CARIB Before being chosen by the State Department to transport goods on behalf of the Contras from late 1985 through mid-1986, SETCO had a long-standing relationship with the largest of the Contra groups, the Honduras-based FDN. Beginning in 1984, SETCO was the principal company used by the Contras in Honduras to transport supplies and personnel for the FDN, carrying at least a million rounds of ammunition, food, uniforms and other military supplies for the Contras from 1983 through 1985. According to testimony before the Iran/Contra Committees by FDN leader Adolfo Calero, SETCO received funds for Contra supply operations from the contra accounts established by Oliver North.[38] U.S. law enforcement records state that SETCO was established by Honduran cocaine trafficker Juan Matta Ballesteros, whose April 1988 extradition from Honduras to the United States in connection with drug trafficking charges caused riots outside the U.S. Embassy in Tegucigalpa. For example, a 1983 Customs Investigative Report states that "SETCO stands for Services Ejectutivos Turistas Commander and is headed by Juan Ramon Mata Ballestros, a class I DEA violator." The same report states that according to the Drug Enforcement Agency, "SETCO aviation is a corporation formed by American businessmen who are dealing with Matta and are smuggling narcotics into the United States."[39] One of the pilots selected to fly Contra supply missions for the FDN for SETCO was Frank Moss, who has been under investigation as an alleged drug trafficker since 1979. Moss has been investigated, although never indicted, for narcotics offenses by ten different law enforcement agencies.[40] In addition to flying Contra supply missions through SETCO, Moss formed his own company in 1985, Hondu Carib, which also flew supplies to the Contras, including weapons and ammunition purchased from R.M. Equipment, an arms company controlled by Ronald Martin and James McCoy.[41]The FDN's arrangement with Moss and Hondu Carib was pursuant to a commercial agreement between the FDN's chief supply officer, Mario Calero, and Moss, under which Calero was to receive an ownership interest in Moss' company. The Subcommittee received documentation that one Moss plane, a DC-4, N90201, was used to move Contra goods from the United States to Honduras.[42] On the basis of information alleging that the plane was being used for drug smuggling, the Customs Service obtained a court order to place a concealed transponder on the plane.[43] A second DC-4 controlled by Moss was chased off the west coast of Florida by the Customs Service while it was dumping what appeared to be a load of drugs, according to law enforcement personnel. When the plane landed at Port Charlotte no drugs were found on board, but the plane's registration was not in order and its last known owners were drug traffickers. Law enforcement personnel also found an address book aboard the plane, containing among other references the telephone numbers of some Contra officials and the Virginia telephone number of Robert Owen, Oliver North's courier.[44] A law enforcement inspection of the plane revealed the presence of significant marijuana residue.[45] DEA seized the aircraft on March 16, 1987. B. FRIGORIFICOS DE PUNTARENAS Frigorificos de Puntarenas is a Costa Rican seafood company which was created as a cover for the laundering of drug money, according to grand jury testimony by one of its partners, and testimony by Ramon Milian Rodriguez, the convicted money launderer who established the company. [46] >From its creation, it was operated and owned by Luis Rodriguez of Miami, Florida, and Carlos Soto and Ubaldo Fernandez, two convicted drug traffickers, to launder drug money.[47] Luis Rodriguez, who according to Massachusetts law enforcement officials directed the largest marijuana smuggling ring in the history of the state, was indicted on drug trafficking charges by the federal government on September 30, 1987 and on tax evasion in connection with the laundering of money through Ocean Hunter on April 5,1988.[48] Luis Rodriguez controlled the bank account held in the name of Frigorificos which received $261,937 in humanitarian assistance funds from the State Department in 1986. Rodriguez signed most of the orders to transfer the funds for the Contras out of that ac-count.[49] Rodriguez was also president of Ocean Hunter, an American seafood company created for him by Ramon Milian-Rodriguez.[50] Ocean Hunter imported seafood it bought from Frigorificos and used the intercompany transactions to launder drug money.[51] In statements before a Florida federal grand jury in connection with a narcotics trafficking prosecution of Luis Rodriguez, Soto testified that he knew Luis Rodriguez as a narcotics trafficker who had been smuggling drugs into the U.S. since 1979. Soto also testified that they were partners in the shipment of 35,000 pounds of marijuana to Massachusetts in 1982.[52] Milian-Rodriguez told Federal authorities about Luis Rodriguez' narcotics trafficking prior to Milian-Rodriguez' arrest in May 1983. In March and April 1984, IRS agents interviewed Luis Rodriguez regarding Ocean Hunter, drug trafficking and money laundering, and he took the Fifth Amendment in response to every question.[53] In September, 1984, Miami police officials advised the FBI of information they had received that Ocean Hunter was funding contra activities through "narcotics transactions," and noting that Luis Rodriguez was its president. This information confirmed previous accounts the FBI had received concerning the involvement of Ocean Hunter and its officers in Contra supply operations involving the Cuban American community.[54] Despite the information possessed by the FBI, Customs and other law enforcement agencies documenting Luis Rodriguez' involvement in narcotics trafficking and money laundering, the State Department used Frigorificos, which he owned and operated, to deliver humanitarian assistance funds to the Contras in late 1985. Official funds for the Contras from the United States began to be deposited into the Frigorificos account in early 1986, and continued until mid-1986.[55] In May 1986, Senator Kerry advised the Justice Department, Drug Enforcement Agency, State Department, NHAO and CIA of allegations he had received involving Luis Rodriguez and his companies in drug trafficking and money laundering. In August 1986, the Foreign Relations Committee asked Justice whether the allegations about Luis Rodriguez were true, and requested documents to determine whether the State Department might have in fact provided funds to a company controlled by drug traffickers. Justice refused to answer the inquiry. The indictment of Luis Rodriguez on drug charges 18 months later demonstrated that the concerns raised by Senator Kerry to the Justice Department and other agencies in May 1986 concerning his companies were well founded, as the State Department had infact chosen companies operated by drug traffickers to supply the Contras.[56] C. DIACSA DIACSA was an aircraft dealership and parts supply company partly owned by the Guerra family of Costa Rica. DIACSA's president, Alfredo Caballero, was under DEA investigation for cocaine trafficking and money laundering when the State Department chose the company to be an NHAO supplier. Caballero was at that time a business associate of Floyd Carlton--the pilot who flew cocaine for Panama's General Noriega. In an affidavit filed in federal court in January, 1985, DEA Special Agent Daniel E. Moritz described working as an undercover money launderer "for the purpose of introducing myself into a criminal organization involved in importing substantial quantities of cocaine into the United States from South America."[57] That organization was the Carlton/Caballero partnership. According to Agent Moritz, the cocaine traffickers used DIACSA offices "as a location for planning smuggling ventures, for assembling and distributing large cash proceeds of narcotics transactions, and for placing telephone calls in furtherance of the smuggling ventures."[58] >From March 1985 until January 1986, Moritz received approximately $3.8 million in U.S. currency from members of this organization "to be distributed, primarily in the form of wire transfers around the world." Most of the $3.8 million was delivered in DIACSA's offices. Moritz met both Alfredo Caballero and Floyd Carlton in March of 1985. Moritz had previously learned from a confidential informant that Carlton was a "major cocaine trafficker from Panama who frequented DIACSA and was a close associate of Alfredo Caballero." The informant added that "Caballero provided aircraft for Floyd Carlton Caceres' cocaine smuggling ventures" and that Caballero allowed Carlton and "members of his organization to use DIACSA offices as a location for planning smuggling ventures, for assembling and distributing large cash proceeds of narcotics transactions and for placing telephone calls in furtherance of the smuggling ventures." Alfredo Caballero was described by the informant "as the man in charge of operations for Floyd Carlton Caceres' cocaine transportation organization."[59] Other members of the group were Miguel Alemany-Soto, who recruited pilots and selected aircraft and landing strips, and Cecilia Saenz-Barria. The confidential informant said that Saenz was a Panamanian "in charge of supervising the landing and refueling of the organization's aircraft at airstrips on the Panama/Costa Rica border" and that he "arranges for bribe payments for certain Costa Rican officials to ensure the protection of these aircraft as they head north loaded with cocaine."[60] During 1984 and 1985, the principal Contra organization, the FDN, chose DIACSA for "intra-account transfers." The laundering of money through DIACSA concealed the fact that some funds for the Contras were through deposits arranged by Lt. Col. Oliver North. [61] The indictments of Carlton, Caballero and five other defendants, including Alfred Caballero's son Luis, were handed down on January 23, 1985. The indictment charged the defendants with bringing into the United States on or about September 23, 1985, 900 pounds of cocaine. In addition, the indictment charged the defendants with laundering $2.6 million between March 25, 1985 and January 13, 1986.[62] Despite the indictments, the State Department made payments on May 14, 1986 and September 3, 1986, totaling $41,120.90 to DIACSA to provide services to the Contras.[63] In addition, the State Department was still doing business with DIACSA on its own behalf six months after the company's principals had been indicted. Court papers filed in the case in July 1986, show that the U.S. Embassies of Panama and Costa Rica were clients of DIACSA. While DIACSA and its principals were engaged in plea bargaining negotiations with the Justice Department regarding the cocaine trafficking and money laundering charges, U.S. Embassy personnel in Panama and Costa Rica were meeting with one of the defendants to discuss purchasing Cessna planes from the company.[64] Each of the defendants in the DIACSA case was ultimately convicted on charges of importing cocaine into the United States. The sentences they received ranged from ten years for one non-cooperating defendant, to nine years for Floyd Carlton, to three years probation for Luis Caballero and five years probation for his father, DIACSA's owner, Alfredo Caballero, as a consequence of their cooperation with the government.[65] D. VORTEX When the State Department signed a contract with Vortex to handle Contra supplies, Michael B. Palmer, then the company's Executive Vice-President signed for Vortex. At the time, Palmer was under active investigation by the FBI in three jurisdictions in connection with his decade-long activity as a drug smuggler, and a federal grand jury was preparing to indict him in Detroit.[66] The contract required Vortex to receive goods for the Contras, store, pack and inventory them. At the time the contract was signed, Vortex's principal assets were two airplanes which Palmer previously used for drug smuggling.[67]Vortex was selected by NHAO assistant director Philip Buechler, following calls among Buechler, Palmer, and Pat Foley, the president of Summit Aviation.[68] --[cont]-- 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! 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