Everyone is talking about how the U.S. government ran cheap cocaine into the U.S. In the early 1980s, just as the so-called "crack explosion" hit the streets, cargo planes hired by U.S. government and protected by the CIA were flying tons of cocaine into major U.S. airports and military bases. From there it was distributed throughout the U.S.--in particular into the Black communities. Large amounts of money raised by this traffic went towards financing the secret CIA war by the contras against Nicaragua.
For ten years, government leaders have blamed ghetto youth for a "drug epidemic." They sent armies of cops to brutalize the people. They have crowded the prisons with a whole generation of youth. And now it leaks out that they were behind the "crack explosion" all along! Recent articles by Gary Webb in the San Jose Mercury kicked off the current controversy by exposing a contra drug ring in Los Angeles.
The CIA denies its agents were involved in the drug trade. And major newspapers claim that there is no proof that CIA agents were involved. Under attack, the chief editor of the San Jose Mercury has pointed out what the Webb series documented and what it did not: "We got to the door of the CIA. We did not get inside the CIA."
In this article, let's get past the door of the CIA--and look at the CIA agents involved in the drug trafficking. Three levels of CIA agents are discussed in this article: First, there are those who were top CIA officials--men like William Casey, Duane Clarridge, Donald Gregg and George Bush. Second, there are CIA officers or operatives--people who attended specialized CIA training schools and who must, by law, be U.S. citizens. Such officers are usually well hidden and act through their field agents. Third, there are CIA field agents, contract agents or assets--these are people paid to conduct espionage or covert activities under the direction of CIA case officers.
It is hard to dig up the truth about CIA operations. CIA agents routinely use elaborate cover stories that portray them as civilians, private mercenaries or "retired" agents. In addition, the 1982 Intelligence Identities Protection Act was passed as the CIA was starting its contra war. This law made it a crime to expose CIA agents. The government first threatens to imprison anyone who exposes what CIA agents are doing--then they accuse their critics of not offering enough "hard proof" of CIA involvement!
The following article is based on materials that have been published elsewhere--most of it testimony given at trials and congressional hearings. It is fragmentary but revealing. We hope it will help readers decide for themselves whether the CIA and its employees were involved in the drug trade.
In 1981, Ronald Reagan appointed William Casey to be the head of the CIA. Over the next years, the Agency greatly expanded its covert activities. One of them was a whole secret war. Former officers of the hated National Guard of Nicaragua's deposed dictator Somoza were hired by the CIA to attack Nicaragua. These were the so-called contras (short for counter-revolutionaries).
In 1982, Casey authorized "Black Eagle"--a secret operation to fund and supply the contras. Casey's plan was to develop a "private" network large enough to secretly arm, finance, and command a whole war--without openly involving official U.S. military forces or intelligence agencies. They called it "The Enterprise"--and it was riddled with "former" CIA officers and agents.
To fund the Enterprise, Casey and his representatives contacted governments closely tied to U.S. imperialism, including the Israelis, Argentinians, the Sultan of Brunei, the Saudi monarchy, and the various CIA-dominated militaries of Central America. In exchange for all kinds of favors, these governments contributed arms, money, and trainers to the Enterprise. This whole operation was exposed during the Iran-contra scandal. But what was covered up during the Iran-contra hearings was that the Enterprise also relied heavily on drug-smuggling operations. The CIA offered large-scale drug smugglers a simple deal: It would prevent U.S. drug and customs agencies from disrupting their cocaine traffic, if these traffickers would airlift and finance the flow of arms to the contras. It was "an offer you can't refuse" from the big godfathers in Washington--the CIA calls such deals "ticket punching."
Casey appointed the high-ranking CIA official Duane Clarridge to be the de facto commander-in-chief of the contra war. In August 1981 before the contra war even started, Clarridge flew down to Honduras, the country just north of Nicaragua, which had been selected as the base area for the CIA's contra war. Clarridge met with Honduran President Policarpo Paz García, military intelligence boss Col. Leonides Torres, and national police chief, Col. Gustavo Alvarez Martínez. These three men were already deeply involved in cocaine traffic. And they were connected to Honduras' main cocaine trafficker, Juan Ramón Matta Ballesteros. "We don't know the extent of the Honduran military's involvement in drugs," a State Department official would later say. "But our educated guess is that all of the senior officials have knowledge, many are involved...and they are all reaping the profits."
Though Matta himself was in prison much of this time, the 1989 report of the Senate's Kerry subcommittee documents that Matta's airline SETCO became the main air carrier for contra supply, "carrying at least a million rounds of ammunition, food, uniforms and other military supplies" between 1983 and 1985. On the return route, the planes often carried cocaine.
In 1983, as SETCO supply runs started, Vice President George Bush put the U.S. Drug Enforcement Agency (DEA) operations under the control of the "national security" apparatus. In June 1983, the DEA office in Honduras was shut down, one month after the local DEA agent started investigating SETCO. Also in 1983, planes of Southern Air Transport (SAT--the CIA's newly "privatized" airline) were seen being loaded with cocaine in Barranquilla, Colombia (Washington Post, Jan. 20, 1987). SETCO and SAT were part of a larger air support network directed by "retired Air Force General" Richard Secord, a military logistics expert who is sometimes described as a CIA official.
Sections of the U.S. ruling class complained that the contras were "ineffective" and were making little progress in overthrowing Nicaragua's Sandinista government. Contra commanders were accused of accumulating wealth instead of fighting. In 1984, Congress passed a law forbidding the U.S. government from directly arming the contras. In response, the CIA moved the day-to-day command of the contra supply away from its Langley offices.
After 1984, the contra operation was overseen by Donald Gregg, a long-time CIA official who was reassigned to be top aide of Vice President George Bush. And within the Reagan White House, Lt. Col. Oliver North of the National Security Council staff (NSC) directed contra supply--under the guidance of William Casey himself. The CIA had kept the operation firmly in tested CIA hands. And at the top, George Bush was given overall command of three key government policy areas: "crisis management," "counterterrorism" and "narcotics policy."
The Enterprise continued to grow. By 1986, the CIA had at least 300 agents operating in Honduras. In 1984, SETCO started receiving funds directly from the U.S. State Department. State Department testimony before congress said that the CIA approved giving funds to Matta's organization. In addition, it was reported that North gave SETCO other money from secret accounts. According to Newsweek, by 1985, Matta's organization was supplying "perhaps one third of all the cocaine consumed in the United States."
When scandal erupted over Enterprise dealings with Iran, Oliver North said, "Casey told me to clean out the files. I shredded documents and altered others." (Time, July 27, 1987) Casey died of a brain tumor in the middle of the Iran-contra scandal.
"I never saw any intelligence suggesting General Noriega's involvement in the drug trade. In fact, we always held up Panama as the model in terms of cooperation with the United States in the war on drugs."
Admiral Daniel Murphy, top drug aide
of Vice President George Bush,
"A Costa Rican legislative commission concluded in 1989 that Noriega helped install in that country at least seven pilots who ran guns to the contras and drugs to North America. `More serious still,' it added, `is the obvious infiltration of international gangs into Costa Rica that made use of the [contra] organization. These requests for Contra help were initiated by Colonel North to General Noriega. They opened a gate so their henchmen utilized the national territory for trafficking in arms and drugs.' "
Peter Dale Scott and Jonathan Marshall
Panama's General Noriega was at the heart of operations funding and supplying contras in Costa Rica. Noriega was first recruited as an agent by the U.S. Defense Intelligence Agency in 1959, while still a teenage military cadet studying in Peru. He went on the CIA's payroll in 1967. The following year, a U.S.-instigated military coup in Panama installed him as head of Panama's military intelligence and secret police. Soon he seized overall power in Panama.
Later, in 1991 trial testimony, the CIA and U.S. Army admitted paying Noriega $322,336 since 1955. This is a very low estimate. Others report that then-CIA director George Bush started paying Noriega $100,000 a year in 1976. During the '80s, Noriega deposited at least $33 million at the Panama City branch of the BCCI bank. Some of these funds were being laundered for the contras, others were Noriega's payoffs for the operations passing through his territory.
To earn his pay, Noriega carried out all kinds of dirty activities for his U.S. masters. He supplied pilots, bases and funds to the contra supply operations. Noriega's close confidant Floyd Carlton Caceres negotiated personally with the top Colombian cocaine smugglers Pablo Escobar and Gustavo Gaviria for the use of Panamanian air bases. Noriega's fees for such services were $200,000 per trip. Floyd Carlton later testified in a U.S. courtroom that their operation flew U.S. guns to the contras in Nicaragua and brought cocaine into the United States on the return flight.
The CIA protected these operations. When the DEA boss in Panama City suggested an investigation into the billions of dollars of drug money passing through Panama, the local CIA station chief insisted that such as investigation must be forbidden to touch Panamanian government officials.
In 1984, the Enterprise was reorganized, and Noriega's contra-drug operations shifted northward from Panama to Costa Rica, Honduras and El Salvador. Between October 1984 and June 1985, the gun-for-drugs operation run by Floyd Carlton alone moved at least four tons of cocaine through northern Costa Rica.
In 1986, the CIA's Duane Clarridge and Oliver North met with Noriega to discuss how to stop the U.S. media from exposing Noriega's operations. North hired a new public relations firm for Noriega. From this evidence it is clear that the top CIA official Clarridge remained deeply involved in these operations.
"I'm not in the arms business. I'm not in the explosives business. I'm not in the drug business...This is a Communist disinformation campaign to try to smear the reputation of the CIA, to try to smear the reputation of our own government."
John Hull 
"According to eyewitness testimony, weapons destined for the contras were flown in small planes to the [Hull] ranch. The planes were then refueled and returned to the United States with cargoes of cocaine. On at least two occasions, according to the testimony, Hull was present while bags of cocaine were transferred to the planes. The report describes successful efforts by United States Embassy officials in Costa Rica to frustrate an investigation by the U.S. attorney in Miami into Hull's activities."
Kerry subcommittee report
The gun-for-drugs operations increasingly used the airstrip on the 1,500-acre Costa Rican ranch of an American named John Hull. Hull lived the life of a feudal Latin America patrón. The CIA's station chief in Costa Rica openly said that Hull was an agent, working on "military supply and other operations on behalf of the Contras." Hull himself told the Washington Times (Jan. 17, 1989) that from 1982 to 1986 he served as the CIA's chief liaison with the Nicaraguan rebels in Costa Rica.
In 1983, Hull traveled to Miami and Washington. In Washington, he was taken to meet Oliver North by Robert Owen. Owen was officially an aide of then-Senator Dan Quayle. However a report written by CIA officer Glenn Robinette described Owen as a "young CIA officer." After this meeting Hull started receiving a $10,000 monthly retainer from Oliver North. On the Miami leg of his trip, Hull met with drug smugglers George Morales and Frank Castro. Morales and his pilot Gary Betzner began flying drugs and guns for the contra supply operation--using Hull's ranch, Fort Lauderdale Executive Airport, and Ilopango Air Force Base in El Salvador. These operations expanded greatly after 1984.
The Kerry subcommittee "found no fewer than five witnesses who testified to Hull's involvement in the narcotics traffic." One witness, Gary Wayne Betzner, testified that he piloted two plane-loads of contra weapons for Morales to John Hulls' ranch in Costa Rica. On both occasions, he said, about 500 kilograms of cocaine were transferred to his plane under Hull's supervision for the return flight to the United States.
In May 1990, Colombian drug kingpin Carlos Lehder told ABC News that Hull was "pumping about 30 tons of cocaine into the United States" every year. Oliver North received reports about the drug financing of the Costa Rican contras from his representative Robert Owen.
Here is a smoking gun in the CIA-cocaine controversy: Hull was a known CIA agent seen supervising the loading of cocaine, and he was protected from investigation by orders from the U.S. embassy.
George Morales testified to the Kerry subcommittee, that his drug-smuggling operation was recruited into the guns-for-drugs operations by Octaviano César in 1983. César, then a top aide of contra leader Eden Pastora, said he spoke for the CIA and would have the drug charges against Morales dropped. Journalist Leslie Cockburn says eight sources, including high-level Washington officials, have confirmed that César was a CIA agent. One of Morales' pilots, Fabio Carrasco, testified at a trial that he delivered millions of dollars of cocaine earnings to Octaviano César and another contra leader. He also said that, with CIA approval, he personally supervised flights of cocaine from Costa Rica to Fort Lauderdale.
In 1984, as this contra supply operation was tightened up, Felix Rodríguez appeared heading up the operation at El Salvador's Ilopango Air Force Base. Rodríguez's career reads like a history lesson in CIA crimes. In 1961, Rodríguez participated in the CIA's failed Bay of Pigs invasion of Cuba. In 1967, he was the CIA agent on the scene in Bolivia when the guerrilla leader Ché Guevara was captured. In his autobiography, Rodríguez claims he personally gave the command to execute Che. Rodríguez liked to show off Che's wristwatch as a memento of this crime.
In Vietnam Rodríguez worked under CIA big-shot Donald Gregg during the murderous death-squad campaign known as "Operation Phoenix"--where CIA agents systematically executed thousands of Vietnamese civilians suspected of supporting revolutionary forces. Rodríguez commanded an elite intelligence unit that threw captives out of helicopters.
Though Cuban-born, Rodríguez became a naturalized U.S. citizen, allowing him to become a full CIA officer. Officially he "retired" from the CIA after 15 years--and in the early 1980s he worked with the Salvadoran military, organizing counterinsurgency against guerrillas.
In 1985, George Bush and Donald Gregg personally assigned Rodríguez to the contra supply effort. Rodríguez (using the name "Max Gómez") emerged as a commander of the contra supply effort at Ilopango Air Force Base. Officially, he had been "hired" by the Salvadoran Air Force. One military intelligence agent, Terry Reed, described Max Gómez as "HMIC"--the Head Motherfucker in Charge--who liked to brag that he had been personally chosen by the White House for the job. His work was supervised at the top by Oliver North and Donald Gregg.
And, under Rodríguez, the drug trade flourished at Ilopango. Celerino Castillo, the DEA's agent in El Salvador, reported on the huge drug-for-arms smuggling operation run out of Ilopango by the CIA. Castillo wrote, "my reports contained not only the names of traffickers, but their destinations, flight paths, tail numbers, and the date and time of each flight. Hundreds of flights each week delivered cocaine to the buyers and returned money headed for the great isthmus laundering machine in Panama." Castillo said the operation was run out of one hangar owned by the CIA and another hangar run by the NSC.
Milian Rodríguez, a drug money launderer, told the Kerry subcommittee that Felix Rodríguez had him launder millions of dollars from dozens of Miami companies tied to cocaine smugglers. For one company alone, he moved about $200,000 a month to the contras in cash by courier. Milian Rodríguez said "Felix would call me with instructions on where to send the money." One of the people who got this money was Adolfo Calero, the civilian head of the contras and a known CIA agent. Felix Rodríguez acknowledged that Milian Rodríguez was an old friend, but denied asking him for drug money.
Richard Brenneke, an Oregon-based arms dealer and former CIA agent, claims he tried to tell Donald Gregg that he was being asked to fly drugs into Texas. Brenneke says Gregg told him, "You do what you were assigned to do. Don't question the decision of your betters." Gregg denies ever speaking with Brenneke.
In 1981, just as the contra war was starting, two Nicaraguan contras, Danielo Blandón and Norwin Meneses, met with Col. Enrique Bermúdez in Honduras. Bermúdez was a top Nicaraguan CIA agent in charge of forming the Fuerza Democrática Nicaraguense (FDN), the main contra force. Blandón was a businessman from a family of wealthy Nicaraguan slumlords who had worked for Nicaragua's pro-U.S. Somoza dictatorship. Meneses was Nicaragua's biggest drug smuggler.
It is not known what was said at this meeting. However after Blandón and Meneses had been brought together by Bermúdez, they set up a large cocaine distribution ring in California. Meneses organized the operation from San Francisco, while Blandón was told to find buyers in the Black communities of Compton and South Central. According to Blandón, his operation sold almost a ton of cocaine in its first year--$54 million worth at wholesale prices.
A 1984 photograph documents that, at the height of these drug operations, Meneses was meeting with Adolfo Calero, who was then the leader of the contras and who was himself a known CIA agent. These relationships were documented by Gary Webb in his recent and now-famous series in the San Jose Mercury.
Since Webb's series was published this summer, more evidence has surfaced. Adolfo Calero now admits that he met Meneses four times in California, and that he met with both Meneses and Blandón once in Honduras. 
Webb's research reveals that the contra networks were involved in the distribution of cocaine. And it reveals that this contra-cocaine network deliberately chose to target Black communities with their drugs.
Webb's research has come under some intense attack. The New York Times, for example, wrote: "...while there are indications in American intelligence files and elsewhere that Mr. Meneses and Mr. Blandón may indeed have provided modest support for the rebels, including perhaps some weapons, there is no evidence that either man was a rebel official or had anything to do with the CIA. Nor is there proof that the relatively small amounts of cocaine they sometimes claimed to have brokered on behalf of the insurgents had a remotely significant role in the explosion of crack that began around the same time."
In an example of double-think, the New York Times writes: "Although Mr. Bermúdez, like other contra leaders, was often paid by the CIA, he was not a CIA agent." Usually, the New York Times (and everyone else) considers anyone receiving a CIA paycheck to be a CIA agent!
What the Webb series revealed is that CIA agents holding leading posts in the contra movement, Bermúdez and Calero, had working relationships with cocaine distributors within the U.S. Webb shows that these relationships started in the very earliest days of that contra war.
Were the cocaine sales of the Blandón-Meneses ring "relatively small"? They were large, involving tons of cocaine. And, at the same time, compared to the larger flood of cocaine entering the United States, they may have been relatively small. However, as we have shown in this article, the key transportation routes for much of that larger flow of cocaine were also set up and protected by the CIA and its agents.
In Part 1 of this series (RW #883) we documented CIA's secret network of cargo planes flying drugs into the U.S.
In Part 2, (RW #884) we explored who knew about this drug trafficking in the highest offices of the U.S. government.
This week, in Part 3, we examined the known activities of men closely "linked" to the CIA.
In the next article, Part 4, we will examine related questions: Did cocaine from CIA networks play a significant role in the creation of a crack epidemic? And did it play a significant role in financing the CIA's secret war?
This whole series will be available on RW Online at:
 Cocaine Politics--Drugs, Armies and the CIA in Central America, Peter Dale Scott and Jonathan Marshall, University of California Press, 1991
 Washington's War on Nicaragua, Holly Sklar, South End Press, 1988
 The Central America Fact Book, Tom Barry and Deb Preusch, Grove Press 1986
 "Noriega: Our Man in Panama," Peter Dale Scott and Jonathan Marshall, Convergence, publication of the Christic Institute, Fall 1991
 Out of Control, Leslie Cockburn, Atlantic Monthly Press, 1987
 "The Contra-Cocaine Connection," Amy Lang Convergence, publication of the Christic Institute, Fall 1991
 "CIA and Drug Trafficking by Contra Supporters," Affidavit by Peter Dale Scott, Ph.D., September 30, 1996
 "Pivotal Figures of Newspaper Series May be Only Bit Players," New York Times, October 21, 1996
 "Tale of CIA and Drugs Has Life of Its Own," New York Times, October 21, 1996
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