OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT OF I

Your relationship with government is simple: government knows everything about you, and you know nothing about government. In practice this means government can do whatever it wants to you before you know it's going to happen. Government policy makers think this is a good way of ensuring citizen compliance. Thus, all of these investigations are retrospective -- they look back at the squirrely shit that government has pulled, and occasionally wring their hands about trying to avoid it happening in the future. Not inspiring reading, but necessary if you are to face the cold reality that Big Brother is more than watching.

Re: OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT

Postby admin » Sun Jun 14, 2015 8:46 pm

PART 3 OF 4

A May 20, 1987 cable indicated that Frixone had admitted to Dominican police that he and his accomplices were planning to go to Colombia to pick up marijuana and that he was to be the pilot. The cable added that Frixone and the others had been released by the judge in November 1980 because of "insufficient evidence."

A June 30, 1987 Headquarters cable indicated that the allegations against Frixone and several others would have to be "clarified" before approval to use them could be initiated. Further, the cable stated that investigative efforts were underway and that all the individuals would be questioned by Security "as soon as possible."

No information has been found to indicate that Frixone was questioned again or that further investigative efforts were made in this regard by CIA or other U.S. Government entities.

No information has been found to indicate that information regarding allegations of drug trafficking by Frixone was provided to the Congress or to other U.S. Government agencies.

Martin Horatio Gomez. Gomez, a native of Medellin, Colombia, was an aircraft mechanic for Vortex/Universal. After about nine months, his contractual relationship with the Agency was terminated on March 8, 1989 for "lack of interest."

The Agency was informed by DEA and Customs in April and May 1987 that Gomez was "criminally associated" with aircraft N50314. According to the April 28, 1987 DEA memorandum, the aircraft was owned by a Miami company and was suspected of being used to transport marijuana or cocaine from Colombia to the United States. On May 13, 1987, Customs provided information to CIA that indicated that Gomez had been suspected of involvement in currency and narcotics smuggling as of 1984 and that he was associated with "numerous alleged narcotics traffickers. . . ."

A June 1, 1987 CIA cable to Customs requested further information on Gomez and three other individuals in an attempt to determine the validity of the allegations. According to the June 1 cable, CIA:

. . . . would appreciate details on the sources of information, including any available assessments on the reliability of the sources and their access to the information (for example, whether through direct involvement in the alleged activity or via hearsay). . . .

In its June 24, 1987 response to CIA, Customs reported it had no additional information regarding Gomez.

No information has been found to indicate that Gomez was questioned by CIA Security. No information has been found to indicate that information regarding allegations of drug trafficking by Gomez was provided to the Congress.

Martin Alberto Gomez. Gomez, an aircraft mechanic, became a naturalized U.S. citizen in July 1986. CIA was informed by DEA on April 28, 1987 that Gomez allegedly had been involved in a drug smuggling organization as of 1981. Another alleged member of that organization was Martin Horatio Gomez, whom the DEA response indicated might have been his father.

Martin Alberto Gomez was questioned by Security on August 29, September 1, and November 3, 1988. The totality of the information he provided led CIA to conclude that he probably was involved in drug trafficking.

In an October 5, 1988 memorandum, an officer in the Office of Security wrote that Gomez "has not cooperated during [two attempts to question him] and it is not likely his attitude will change with additional processing." The memorandum therefore recommended that "[the cognizant CIA office] be requested to cancel interest" in Gomez. A November 15, 1988 memorandum from an Operational Evaluation Section officer to the Chief of the Staff and Operations Branch indicated that SAS had refused to "cancel interest" in Gomez, and that he was given a third opportunity for clarification on November 3, 1988. According to the memorandum, major concerns remained concerning the use of illegal drugs." His relationship with CIA was terminated in "mid-March 1989."

No information has been found to indicate that information regarding drug trafficking by Gomez was provided to the Congress or to other U.S. Government agencies.

Irving Silva. Silva, as noted in the April 28, 1987 DEA report, was implicated with Palmer in the September 1986 drug smuggling incident in northern Mexico involving 19,000 pounds of marijuana destined for the United States.

According to a February 29, 1988 memorandum to OGC's Assistant General Counsel regarding CIA contacts with Vortex/Universal Air Leasing, Silva was employed part-time by Vortex/Universal from December 1986 to January 1987 to provide navigational training to the ERN. The April 28, 1987 DEA trace response implicated Silva in the September 1986 Mexico marijuana smuggling incident.

No information has been found to indicate that Silva was questioned by CIA Security or that the Agency took other action to follow-up or verify the information linking Silva to drug trafficking. No information has been found to indicate when CIA terminated its relationship with him.

No information has been found to indicate that information regarding allegations of drug trafficking by Silva was provided to the Congress.

Mauricio Letona. Letona apparently was hired by Vortex/Universal in late 1986/early 1987 along with Haas and others under the subcontract with the prime contractor in support of CIA assistance to the Contras.

The Agency terminated its relationship with Letona on May 8, 1987. A May 13, 1987 Customs cable to CIA indicated that Letona had been suspected in 1980 of using his affiliation with an El Salvadoran airline to smuggle cocaine.

No information has been found to indicate that information regarding allegations of drug trafficking by Letona was provided to the Congress.

Stephen Herreros. The April 28, 1987 DEA response to a CIA trace request reported that Herreros was listed in the files of the El Paso Intelligence Center as having been involved in the September 1986 marijuana smuggling incident along with Palmer and other Vortex/Universal employees.

No information has been found to indicate the nature of Herreros' relationship with Vortex/Universal or that he had any relationship with CIA. No information has been found to indicate that CIA took any action regarding the information relating to Herreros and drug trafficking.

No information has been found to indicate that information regarding allegations of drug trafficking by Herreros was provided to the Congress.
What was the nature and extent of CIA's knowledge of allegations of Contra drug trafficking at the Ilopango Air Base?

Background. Between 1981 and the 1984 congressional funding cutoff, the Agency provided support services to the Contra program from the El Salvadoran air base at Ilopango--located a few miles to the east of San Salvador. Ilopango Air Base was controlled by the Salvadoran military but was used by CIA as a storage point and staging area for shipments of supplies to the Contras. In the course of these functions, CIA personnel had frequent contacts at Ilopango with Contra pilots and other personnel who came to Ilopango to pick up supplies. CIA personnel were frequently present at Ilopango and sometimes assisted when supplies were loaded onto aircraft operated by Contra pilots.

To support CIA activities at Ilopango, CIA occupied a newly constructed warehouse and hangar in 1984--commonly referred to as Hangar 5--and relocated to it activities that had been conducted in a smaller nearby hangar-- commonly referred to as Hangar 4. After CIA had moved out of Hangar 4, it was used in 1985 and 1986 by NHAO and the Private Benefactors in support of their Contra-related operations. Hangars 4 and 5 shared a common aircraft parking area and were located on a restricted area of the Ilopango air base that was controlled by the Salvadoran military. Another area of Ilopango air base was devoted to civil aviation. Access to that area reportedly was not restricted.

Following the 1984 congressional funding cutoff, supplies that remained at Ilopango were distributed to the Contras by CIA personnel. Thereafter, visits by CIA personnel to Ilopango occurred less frequently. Contra personnel, however, continued to visit Ilopango in connection with support being provided to the Contras by NHAO and the Private Benefactors.

Following congressional approval of the $100 million Contra support program in October 1986, Ilopango Air Base had much less importance to the Contra program.

There have been three main sources of allegations of drug trafficking at Ilopango—a U.S. citizen, Celerino Castillo(34) and a CIA/DEA source known as STG6. The allegations of each of these sources and what CIA knew about them are described below.

Allegations of Contra drug trafficking at Ilopango—a U.S. citizen. According to an October 23, 1986 cable to Headquarters, the "narcotics coordinator" at the U.S. Embassy in Tegucigalpa had said there would be an arrest in San Salvador of a specifically named American citizen. According to the cable, the U.S. citizen was to be arrested:
. . . on narcotics trafficking charges. [The U.S. citizen] will be arrested today or tomorrow by regional [DEA] agent [Celerino Castillo] and charged with cocaine trafficking to the U.S. [U.S. Embassy/Tegucigalpa] alerted [CIA] because [the U.S. citizen] is allegedly some way involved [sic] with [Max Gomez] and also allegedly has [United Nicaraguan Resistance/FDN Directorate] contacts and operates his business out of [Hangar 4], supposedly using [Private Benefactor] pilots and aircraft as part of his drug network. [The U.S. citizen's] home in San Salvador was raided about one month ago and guns and a variety of drugs were discovered. [DEA] believes [the U.S. citizen] will attempt to use publicity of his alleged [U.S. Government] ties to defeat any prosecution on drug charges. We have no other details on this matter and are not likely to receive more since regional [DEA representative] operates from Guatemala City. . . .

(Emphasis added.)

Allegations of Contra drug trafficking at Ilopango--former DEA Special Agent Celerino Castillo. In his book Powderburns: Cocaine, Contras & the Drug War (© Celerino Castillo III and Dave Harmon, 1994), former DEA Special Agent Celerino Castillo alleged that Ilopango was used by the Contras to support Contra drug trafficking activities. According to Powderburns, much of Castillo's information relating to alleged Contra drug trafficking at Ilopango was provided to him by DEA informants, one of whom reportedly worked at the civil air section of Ilopango air base. In Powderburns, Castillo referred to this informant at Ilopango as "Hugo Martinez."

In Powderburns, Castillo said he arrived in Guatemala in October of 1985 and served until 1990 in the regional DEA office in Guatemala City. Castillo's responsibilities while assigned to the regional DEA office included El Salvador. Castillo said that, soon after his arrival in Guatemala City, his duties brought him into contact with CIA officials both in Guatemala and in El Salvador. Castillo alleged in Powderburns that, in at least two instances, he discussed the allegations relating to Contra drug trafficking with CIA officials.

The first instance related to a discussion that Castillo said he had with the San Salvador COS in 1986. As related in Powderburns:

. . . On August 15, I met with Jack McCavett , the mild-mannered CIA station chief in El Salvador. Again, I repeated my evidence against the Contras. McCavett denied any connection between the CIA and the Ilopango operation. As far as [William] Brasher was concerned, McCavett said "He doesn't work for me. He works for the Contras and Ollie North, and we have nothing to do with that operation."

Three days later, McCavett called me into his office and pulled $45,000 in cash out of his desk drawer. "I've got money left over from my budget I need to spend," he said. "Take this for your anti-narcotics group. Go buy them some cars." McCavett didn't mention the Contras, but I suspected he was trying to buy me off. The CIA, to my knowledge, had never given the DEA this kind of gift. I wrote out a receipt and handed it to him, took the stack of bills, and gave it to Adame and Aparecio. They bought three much needed vehicles for [an El Salvadoran Police organization].

In the second instance cited in Powderburns, Castillo claimed he discussed Contra drug trafficking activities with "Randy Kapasar, a CIA agent in Guatemala:"

He knew I was investigating the Contras. I knew he was helping them. I expected him to deny my evidence of the Contras' narcotrafficking but he followed Sofi's reasoning: "Cele, how do you think the Contras are gonna make money? They've got to run dope, that's the only way we can finance this operation."

Allegations of Contra Drug Trafficking at Ilopango—STG6. CIA records indicate that, from September 16, 1986 until August 7, 1989, STG6 was an Agency contact who provided information pertaining to drug trafficking and other subjects. He was turned over to DEA following the termination of his relationship with CIA on August 7, 1989.

On at least two occasions, STG6 provided CIA with lead information that related to possible Contra drug trafficking activities at Ilopango. The first report of this nature was described in a September 23, 1986 cable to Headquarters. According to the cable, STG6 provided the names of two Colombians who were linked to Contra pilot Carlos Amador. Amador, the cable stated, was "suspected of involvement in narcotics trafficking."

The second report from STG6 to CIA regarding possible Contra drug trafficking at Ilopango was described in a March 23, 1988 cable to Headquarters. According to that cable, STG6 had reported that a Guatemalan citizen and suspected drug trafficker named Reyner Veliz had recently been traveling with Contra pilot Marcos Aguado.

CIA Records: A U.S. Citizen. Apart from the U.S. citizen's claims and an April 8, 1987 cable to Headquarters reporting an unsolicited telephone call from the U.S. citizen, no information has been found to indicate that CIA had any relationship with the U.S. citizen. Also, no information has been found to indicate that the U.S. citizen's activities in El Salvador were related to the Contras in any manner, other than the October 23, 1986 cable reporting and a reference to him and the Contras in an April 25, 1986 cable--described further below--pertaining to the arrest of suspected American mercenaries in Brazil.

The April 25, 1986 cable --as mentioned earlier--also made a reference to the U.S. citizen and the Contras. This cable provided an update regarding the arrest of American citizens suspected of being mercenaries in Brazil. According to the cable, the detainees had been visited in prison by the U.S. citizen and another person, "both of whom are apparent friends of several of the detained mercenaries." Regarding the U.S. citizen, the cable stated that:

. . . visiting U.S. Consul. . . .who previously served in San Salvador, told [Consul General] on 25 April he remembers [the U.S. citizen] as being associated with [CIA] in San Salvador as a military advisor to Contras operating on the Honduran border with El Salvador.(35)

In response to the October 23, 1986 cable regarding the U.S. citizen's pending arrest in El Salvador, an October 25, 1986 Headquarters cable requested any available information regarding whether ". . . there is any truth to [the U.S. citizen's] claims of contact" with the United Nicaraguan Resistance/FDN Directorate as well as "possible operations" conducted out of Hangar 4 at Ilopango. The Headquarters cable also provided a lengthy summary of earlier instances in which the U.S. citizen's name had appeared in CIA records:

A cable had reported on August 27, 1986 that the U.S. citizen had provided night vision equipment to the Salvadoran military as part of a contract that he had with the Salvadoran Government. He reportedly told Salvadoran and U.S. military officials in El Salvador that CIA had "paid his salary in the past and made some broad hints as to a current [CIA] relationship."

A May 14, 1986 cable stated that the U.S. citizen had become a subject of investigative interest to the U.S. Customs Service's Office of Special Investigations in New York for allegedly exporting equipment not licensed for export. The U.S. Customs Service said that it would remove his name from its watchlist if his activities were connected to the CIA or other U.S. intelligence organizations. CIA file reviews had found no information to indicate that the U.S. citizen was connected to CIA and, thus, the U.S. Customs Service "intended to continue their investigation with a goal of prosecuting him." Further,

. . . the most recent incident which aroused [U.S. Customs Service] suspicions occurred on 3 May 1986 when [the U.S. citizen] was supposedly forced to make an emergency landing in his plane in the general area of Tamiami, Florida. [He] told fire department officials who responded to his landing that he was carrying two large cases of top secret material (whether equipment or documents unclear). He asked the fire department people to secure the material while he went to the nearest airport to clear customs. After having gone through a clearance procedure which made no mention of the "sensitive" material, [the U.S. citizen] returned to the fire department building, retrieved his two cases, and disappeared. As a result of this and other incidents, [he] was placed on an [U.S. Customs Service] watchlist which would ensure a very stringent search of him and his possessions/vehicles any time he surfaced at an [U.S. Customs Service] office or branch.

A May 15, 1986 cable reported that, following the May 3 crash, DEA personnel had asked if CIA had any connection with the U.S. citizen. According to the summary, DEA had reported that he told firemen responding to the crash that three Salvadoran passengers traveling with him were being transported to Fort Bragg, North Carolina "on behalf of [CIA]" The U.S. citizen, according to DEA, reportedly offered the firemen a $100 bribe if they "would not report his activity relative to the Salvadorans to authorities." The cable had also stated that DEA planned a "follow-up investigation" of the U.S. citizen on suspicion of narcotics trafficking.

July 1, 1986, cable reported that at a June 27, 1986 meeting with FBI and Metro Dade Police Department representatives that, when the U.S. citizen returned to retrieve two suitcases that he had left in the custody of fire officials following the crash, he was accompanied by a Metro Dade reserve police officer "who also claimed connection with [CIA] and vouched for [him]." According to the summary, further inquiry into the Metro Dade reserve police officer's involvement in the matter had been delayed by police officials "for fear of interfering with a [CIA] operation." The cable went on to state that a review of CIA files at that time had revealed no information concerning the reserve police officer or the names of the Salvadorans who allegedly were passengers on the U.S. citizen's airplane.

According to an October 29, 1986 response to the October 25 Headquarters cable, "preliminary checks" with senior Contra officials regarding any contacts between the FDN and the U.S. citizen were "negative."

A March 26, 1987 cable to Headquarters reported that the U.S. citizen and another individual had been arrested by Dominican Republic authorities upon landing an airplane in that country. The airplane contained various types of military-related equipment. According to the cable:

[The U.S. citizen and his companion] also claim to be involved in military training in Central America and are reluctant to discuss what they are doing and for whom. Intentional or not, they are leaving the impression that they are working for [CIA].

A March 27, 1987 cable to Headquarters reported that the U.S. citizen had recently sought to sell equipment to the Venezuelan Government and that a Venezuelan official said that the U.S. citizen "showed him 'State Department credentials' . . . and [he] claimed that he worked for [a Central American Station']."

A March 27, 1987, cable in response to the March 26, 1987 report summarized what was known about the U.S. citizen's activities in El Salvador:

[The U.S. citizen] has falsely represented himself on prior occasions as being associated with [CIA]. He has no relationship with [CIA] but he was in San Salvador until two or three months ago, trying to sell weapons and military gear of various kinds to the Salvadoran military. He left El Salvador in a hurry after a police search of his house here uncovered a large quantity of various unlicensed, unregistered military arms, including hand grenades. When last we heard he was under investigation by U.S. Customs in relation to this incident. He was also under investigation earlier by DEA for possible narcotics smuggling. He seems to have a history of inventing supposed contacts with the USG[overnment], particularly [CIA], which he then uses to pursue his various business interests.

. . . .

According to an April 8, 1987 cable to Headquarters and several Stations, a CIA officer serving abroad had received an unsolicited telephone call from the U.S. citizen. The cable reported that he told the officer during the call that he had been given the officer's name and telephone number from the commanding officer of the USMILGROUP. The cable, in noting that the commanding officer of the USMILGROUP was out of town, said the gist of the U.S. citizen's conversation with the officer was:

"You don't know me, but I got your name from [commanding officer, USMILGROUP]. I was just down there and I sell night vision equipment. [Commanding officer, USMILGROUP] thought it might be a good idea to talk to you." [The U.S. citizen] said he planned another visit . . . . on/about 24/25 April and wondered if there would be an opportunity to talk with [the officer].

In a follow-on cable on April 9, 1997 to Headquarters, it was confirmed that the commanding officer of the USMILGROUP had indeed passed the officer's name and phone number to the U.S. citizen after telling the COS that "there was DoD contractor in town selling the . . . military night vision equipment and wanted to know if the police would have any interest." According to the cable, the commanding officer of the USMILGROUP did not mention the name of the contractor, but had passed the officer's name to the U.S. citizen on the assumption that the COS would concur.

In an April 10, 1987 cable, Headquarters provided guidance with respect to contacts with the U.S. citizen:

[Headquarters] appreciates information provided . . . . regarding telephone conversation with [the U.S. citizen]. As Station is aware, [he] is notorious for falsely claiming [CIA] affiliation in addition to his involvement in other nefarious schemes. In light of this fact, Station is urged to politely but firmly refuse further contact with [the U.S. citizen]. Please advise any further attempts by [him] to contact other Station/Mission personnel.

According to an April 13, 1987 cable to Headquarters, :

. . . MILGROUP commander is in contact with [the U.S. citizen] and presumably will meet with [him] when latter arrives near end of month. We have no desire to give [him] another window into this mission and we will follow [the April 10 Headquarters] guidance accordingly, but wonder . . . whether it would be more in line with an embassy officer to hear him out and then turn off the contact? . . . .

The cable also asked Headquarters "whether we should have [the U.S. citizen's] plane carefully searched. We think the Customs Police should do so."

In its April 16, 1987 response, Headquarters provided explicit instructions: "Station to avoid contact with [the U.S. citizen]." Further, the Headquarters cable stated that:

. . . .

[The U.S. citizen] must be considered [a United States] person since he is evidently a resident and able to freely enter and exit the country. [CIA] should not become involved in making any decision whether or not to search his plane. We note that there is no indication in [his] file of any warrant outstanding against him.

. . . .

The U.S. citizen's name appears in other Agency cables. However, as stated earlier, no information has been found to indicate that he or his activities had any connection to CIA or the Contras.

CIA Records: Castillo's contacts with CIA officials. CIA records indicate that in mid-1986, CIA planned an expenditure of $45,000 to purchase three vehicles for the Government of El Salvador. The money was accounted for in CIA records on August 18, 1986, the same date Castillo alleged in Powderburns that he received $45,000 from a person he refers to as COS McCavett. Although no information has been found to indicate the process by which the vehicles were purchased and given over to the Salvadorans, no information has been found to indicate that the transaction involved Castillo or DEA in any manner.

CIA Records: Contacts with STG6. STG6 became a CIA contact in late 1986. CIA records indicate that DEA had an ongoing operational interest in STG6. According to a November 18, 1987 cable to Headquarters, a regional DEA office had indicated that this particular individual was a "source of information regarding illegal aircraft movements/narcotics trafficking" at Ilopango air base.

A January 18, 1988, cable to Headquarters noted that the DEA representative had said that the DEA regional chief had been briefed regarding STG6 prior to DEA expressing interest in him:

STG6 has access to valuable and unique information by virtue of his job and [he] said that [DEA] needs this data regarding movement of aircraft in the region. Station wished to pass this view so that appropriate STG6 information can be passed to [DEA] for action.

Information provided by STG6, on occasion, was transmitted with a request that the information be passed to the regional DEA office or shared directly with a representative from the regional DEA office during meetings with CIA personnel. Of these reports, only one had any apparent Contra connection:

A March 23, 1988 cable indicating that Guatemalan citizen and suspected drug trafficker Reyner Veliz was traveling with Contra pilot Marcos Aguado. Included in this cable was a request that this information be passed to the regional DEA office with the following caveat: "Please omit specific locations of travel and location of source [i.e., STG6]"."

According to a July 31, 1989 cable to Headquarters, CIA officers met with a representative from the DEA's regional office in Guatemala City on July 24-28, 1989. As a result of that meeting, an offer was made to the DEA representative to turnover STG6 to DEA.

According to an August 1, 1989 cable, DEA "definitely agrees to take over STG6." Headquarters approved the turnover of him in an August 2, 1989 cable.

Individual Statements: CIA personnel. A CIA officer who was closely aware of events at Ilopango during the 1981-1983 time frame and from May 1984 until May 1986 recalls that, until the 1984 congressional cutoff of funds, he had frequent contacts with Contra pilots. After the cutoff, these contacts diminished, although certain authorized contacts were permitted to continue.

The officer says he has no knowledge of drug trafficking at Ilopango. He comments that he frequently observed and--prior to the 1984 funding cutoff--sometimes assisted with the loading of supplies onto Contra aircraft at Ilopango. He is very doubtful that illicit drugs could have been placed on board Contra aircraft during the times he was present. Moreover, he notes that the aircraft he observed being loaded with supplies were destined, not for the United States, but for Contras operating in Central America. Following the 1984 funding cutoff, he says he continued to observe and monitor the activities of Contra aircraft.

According to the officer, the Salvadoran Air Force provided the Contra pilots with identification cards that allowed the pilots to bypass Salvadoran customs upon landing at Ilopango and also allowed them unrestricted access to the air base. He says the commanding officer of Ilopango, General Juan Bustillo, was a staunch supporter of the Contras and, because of this support, he authorized the pilots to be issued the identification cards to facilitate such access. The CIA, according to the officer, had nothing to do with the issuance or control of these identification cards.

The officer says Contra pilots sometimes parked their aircraft at a location some distance away and in an area of the military side of Ilopango that was not easily observable from the base control tower or from the nearby civilian side of the airfield. Particularly after the 1984 funding cutoff, Contra planes could easily come and go from Ilopango without CIA knowledge, he says.

A helicopter pilot who worked for a CIA contractor at Ilopango from 1984 until 1986 says he was instructed by CIA to keep Contra personnel at arms length following the 1984 funding cutoff. He says he has no knowledge of Contras using Ilopango for drug trafficking.

A senior CIA officer who was aware of CIA activities at Ilopango does not recall learning of any specific allegation relating to Contra use of Ilopango to support any drug trafficking activities. He does, however, recall that there were unsubstantiated drug-related allegations against Contra pilot Marcos Aguado.

Another senior officer recalls that he asked the officer who was closely aware of events at Ilopango to look into allegations of drug trafficking by the Contras or others and that the officer was never able to confirm any of the allegations.

A third senior officer who had some awareness of activities at Ilopango says he has no knowledge of Ilopango being used by the Contras for drug trafficking.

Another officer who possibly would have been aware of activities at Ilopango says he knows of no Contra drug trafficking activity at Ilopango and opines that the Salvadoran Ilopango base commander, General Bustillo, would not have tolerated such activity.

Another retired CIA officer who frequently visited Ilopango says that he has no recollection of Contras coming through Ilopango during his tour in Ilopango. "I can be definite that [the Contras] never came to my attention," he says.

An officer who says he met former DEA Special Agent Celerino Castillo in Guatemala and, on one occasion, worked with him and others on a project unrelated to the Contras, recalls Castillo discussing suspected narcotics trafficking at Ilopango, but recalls that Castillo made no specific reference to possible Contra involvement in those activities. Contrary to Castillo's claims, this officer emphatically denies that he had any knowledge of Contra drug trafficking activities at Ilopango or elsewhere. He also denies that he made any statement to Castillo relating to such knowledge. He also denies that he ever asked Castillo to back away from any narcotics investigation.

Felix Rodriguez retired from CIA in 1976. He was an advisor to the Salvadoran military in a private capacity at Ilopango from February 1985 until the late 1980s.(36) Rodriguez also assisted the Private Benefactors at Ilopango in providing aid to the Contras. Rodriguez states that he has no knowledge of any alleged Contra drug trafficking activities being conducted from Ilopango or elsewhere. Rodriguez also says he personally knew the U.S. citizen in El Salvador, that he dealt with the Salvadoran military as a salesman of various military related equipment and that he had no apparent links to the Contras. Rodriguez denies having any knowledge of any alleged drug trafficking by the U.S. citizen, but says he understands that he was banned from making further sales to the Salvadoran military when Salvadoran officials determined that he was allegedly charging the Salvadoran military exorbitant prices for military equipment.

Individual Statements: DEA Personnel. A DEA intelligence analyst recalls that he participated in DEA's review of Castillo's allegations regarding drug trafficking activities at Ilopango. The analyst also states that he participated in DEA's coordination of the January 21, 1987 Memorandum from Acting DCI Robert Gates regarding allegations of Contra drug trafficking that was requested by Assistant Secretary of State for INR Morton Abramowitz. He recalls that DEA found no information to support Castillo's allegations linking the Contras to drug trafficking. "It was [DEA's] experience that all of the Contra allegations lacked substance . . . ," he asserts.

Individual Statements: A U.S. Citizen. The U.S. citizen denies any involvement in smuggling weapons or drugs. He says he never worked for CIA and was never recruited to work for CIA. He also says his only connection with the Contras was that he once met "one Contra pilot" briefly. He says he does not recall the pilot's name or the particular circumstance of the meeting. The U.S. citizen claims that Salvadoran authorities allowed him to utilize Hanger 3--not Hangars 4 or 5--at Ilopango to install equipment in Salvadoran military helicopters. According to the U.S. citizen, CIA controlled Hangars 4 and 5 and he never entered those hangars.

Information Sharing with Other U.S. Government Entities. In addition to the instances described earlier wherein information relating to alleged drug trafficking at Ilopango was shared with DEA, allegations that Ilopango air base may have been used by the Contras for drug trafficking were discussed in the January 21, 1987 Memorandum from Gates to Abramowitz concerning alleged Contra drug trafficking connections that was coordinated with other Intelligence Community agencies and DEA prior to its dissemination. According to the Memorandum:

In March 1986, DEA/Guatemala began receiving reports of suspicious activities at Ilopango Airfield in San Salvador, El Salvador. According to . . . DEA [information], a hangar at the airfield was being used by traffickers to store cocaine en route to the U.S. The hangar reportedly was being used in transporting arms to the Contras. DEA/Guatemala investigated these reports and decided there was insufficient evidence to warrant pursuing a drug investigation. DEA did, however, inform the U.S. Customs Service of other information discovered in the course of the investigation that related to possible weapons smuggling activity.

In a January 21, 1987 letter to Abramowitz that accompanied the Memorandum regarding alleged Contra drug connections, ADCI Gates discussed DEA plans regarding allegations of drug-related activity at Ilopango:

We are told that DEA Headquarters plans to follow up on the matter of the adequacy of DEA/Guatemala's investigation of alleged drug trafficking at Ilopango Airfield in El Salvador . . . . DEA will report additional information as it becomes available. The Intelligence Community has no information independent of DEA regarding this matter.

A March 31, 1988 Office of Congressional Affairs Memorandum for the Record indicates that SSCI Staff Director Sven Holmes was provided a copy of the Gates-Abramowitz Memorandum on March 29, 1988.

To what extent did CIA disseminate "finished intelligence products" that included information about drug trafficking on the part of individuals, organizations, and independent contractors associated with the Contras?(37)

The Analytic Environment. Agency analysts who were responsible for counternarcotics issues during the 1980s indicate that three factors accounted for the small number of finished intelligence products during the 1980s that related at all to the Contras and narcotics trafficking. First, Central America in general was not a high priority counternarcotics target for the Agency before 1986. This reflected primarily the focus of U.S. Government policymakers on Latin American drug suppliers, in particular the Medellin Cartel in Colombia. According to a CIA officer, who was Assistant National Intelligence Officer (NIO) for Narcotics from 1984 to 1986 and Chief of a division in the DI's Office of Global Issues (OGI) dealing with international narcotics from 1986 to 1989, the counternarcotics effort was "consumed" with the Medellin Cartel because it was the main actor in the cocaine trade. The Agency concentrated on targets, such as the Cartel, as to which DEA had operations underway or in the planning stages that intelligence could support.

The CIA officer recalls that Central America was on the screen occasionally because the Colombian cartels were setting up alternative transit routes there--particularly in Guatemala and Nicaragua--in an effort to circumvent the U.S. interdiction effort. Even so, the region was "just a blip on the scope" for the most part. This CIA officer and several other Agency analysts note that, with respect to Nicaragua, the U.S. policy focus was on the Sandinista Government's involvement in narcotics trafficking--not on that of the Contras. The policymakers, one analyst asserts, really wanted to "get" the Sandinistas on this subject.

The second factor, which was a consequence of U.S. policymaker priorities, was that the DO assigned a low priority to collecting intelligence concerning the Contras alleged involvement in narcotics trafficking. As a result, Agency analysts had only a small number of reports on which to base their analysis. According to CIA records, only three DO reports regarding Contra drug trafficking were found to have been disseminated between October and December 1984. These were the reports describing the alleged agreement between Pastora's associates and a Miami-based drug trafficker involving material support for the Contras in return for the trafficker's access to the Southern Front's pilots and landing strips.

Furthermore, the reports were disseminated as "Sensitive Memorandums," a format that required strict access control. The internal dissemination lists for the reports indicate that all three were shared with the Directorate of Intelligence's (DI's) Office of African and Latin American Analysis and with the National Intelligence Officer (NIO) for Latin America. The NIO for Narcotics received two of the three reports. However, the Office of Global Issues (OGI), which was responsible for counternarcotics analysis in the DI, did not receive copies of the reports. Further, the strict access controls made it difficult for analysts to incorporate information from the reports into finished intelligence products that would have a broader dissemination.

The analyst who drafted a Memorandum for Vice President Bush in April 1986 that related to potential Contras' involvement in drug trafficking recalls that OGI analysts who worked on counternarcotics issues were not aware of those reports at the time--October to December 1984--that they were first disseminated inside and outside the Agency. However, she says that CATF Chief Fiers did make the reporting available to her in April 1986, stipulating that it could be used only for the Memorandum she was preparing for Vice President Bush.

A CIA officer, who was a Division Chief in ALA from 1984 to 1986, says that he does not recall any significant reporting in autumn 1984 with respect to the alleged agreement between Pastora's associates and Miami drug trafficker Morales. Nor does he recall any credible narcotics reporting during his tenure that would have merited treatment in a finished intelligence product.

The Assistant NIO and the then-NIO for Latin America say that the DI was largely unaware of the totality of DO reporting on the issue of Contras and narcotics trafficking. The former of the two officers notes that there was a sharp divide in those days between the DO and DI narcotics analysis and there was not a "free flow of information." He states that, although the DO would cooperate in providing information for certain high priority tasking such as the January 21, 1987 Memorandum from ADCI Gates to Assistant Secretary of State Abramowitz, the DO had to be pulled along on the counternarcotics effort for the most part. The former of the two officers adds that the DO became very engaged in Latin America after April 1986.

The then-NIO for Latin America says that ALA's Division and the DO's LA Division had an agreement that the ALA analysts could review relevant operational cables. LA Division, however, determined what was relevant, and "so-called administrative traffic" involving DO assets was off limits. Further, he states that the DI and National Intelligence Council did not believe that the Contras were an effective insurgent force, thus causing problems for CATF. Consequently, he says, he always felt that Fiers was not showing the analysts any reporting that would cause problems for the Contra program. He cannot document what reporting might have been withheld from him "because . . . you don't know what you're not seeing."

The former ALA Division Chief says that the relationship between his DI division and CATF was fairly collaborative even though Fiers would not be at the top of his list of good collaborators. He asserts that Fiers "played a lot of things close to his vest" as he should have. However, everything of substance was fully discussed among Assistant Secretary of State Elliott Abrams, Fiers and the NIO/Latin America. He recalls discussions of Contra stealing, smuggling and other wrongdoing, but no discussion of narcotics trafficking. Narcotics was not one of the topics of concern at the time.

An officer, who served as LA Division Chief of Reports from 1979 to mid-1984 and then served as the ALA Division Chief's deputy in the DI until 1986, says that she is not aware that anyone associated with the Agency suppressed reporting concerning drug trafficking by the Contras. She avers that she would have been "in Fiers' face" were he to "fool with the information to make [CIA] look good." Concerning the lack of finished intelligence concerning the Contras and drug trafficking, she states that the issue would not become apparent without DO reporting, and the analysts would keep whatever information became available in a file until there was a reason to do something with it.

The third factor explaining why very little finished intelligence was produced by the DI regarding Contra drug trafficking was that Agency analysts had limited access to reporting from federal law enforcement agencies at the time. The former ALA Division Deputy Chief points out that DEA, not the DO, was the primary collector of narcotics trafficking information in the early 1980s. Along these lines, one DI analyst recalls that DEA was even reluctant to provide this reporting, probably because it pertained to ongoing investigations.(38) A senior DI officer recalls that CIA analysts had routine access to strategic and tactical DEA intelligence reporting, but not to law enforcement investigative and operational information.

CIA only disseminated three finished intelligence products during the 1980s that related at all to potential Contra involvement in narcotics trafficking. These were: (i) a 1985 National Intelligence Estimate (NIE) concerning the international narcotics trade; (ii) an April 1986 Memorandum for Vice President George Bush; and (iii) the January 1987 Memorandum from Acting DCI Robert Gates to Assistant Secretary of State for Intelligence and Research Morton Abramowitz.

1985 National Intelligence Estimate. National Intelligence Estimate (NIE) 1/8-85, "The International Narcotics Trade: Implications for US Security," was published in November 1985. One paragraph dealt with trends in the "narcotics industry" and noted that the "continued expansion of trafficking routes through Central America" was of "particular concern because of the number of antigovernment insurgent groups active there." The paragraph went on to note:

We have no confirmed reports that link Central American insurgent groups with drug trafficking, but we cannot rule out the possibility that individual contacts have already occurred.

The estimate made no explicit reference to the Contras or any other specific insurgent group in Central America.

A senior DI officer says that the Contras were not dealt with in the NIE because the focus of the estimate was on the "bad guys"--individuals, groups, and governments, such as the Sandinistas, that were hostile to U.S. interests. The Contras, he states, were regarded as friends and were outside the scope of the Estimate. There was never any discussion about including them; "it just never came up." The then-NIO does not recall any discussion among Intelligence Community analysts who participated in the production of the NIE concerning the acquisition of more intelligence reporting concerning insurgent groups and their ties to narcotics traffickers.

1986 Memorandum for Vice President Bush. On April 6, 1986, a Memorandum entitled "Contra Involvement in Drug Trafficking" was prepared by CIA at the request of Vice President Bush. The Memorandum provided a summary of information that had been received in late 1984 regarding the alleged agreement between Southern Front Contra leader Eden Pastora's associates and Miami-based drug trafficker Jorge Morales. Morales reportedly had offered financial and aircraft support for the Contras in exchange for FRS pilots to "transship" Colombian cocaine to the United States. CIA disseminated this memorandum only to the Vice President.

The DI/OGI analyst who drafted the Memorandum says that there was no follow-up. Furthermore, the analyst recalls no further DI discussion of the Contras' alleged involvement in drug trafficking until the Memorandum that was written for Assistant Secretary of State Abramowitz in 1987.

1987 Memorandum for Abramowitz. The most comprehensive discussion of alleged Contra narcotics trafficking was included in a January 21, 1987 Memorandum from Acting DCI Robert Gates to DoS Assistant Secretary for Intelligence and Research Morton Abramowitz. The genesis of this Memorandum, entitled "Assessment of Alleged Connections Between Drug Traffickers and Anti-Sandinista ('Contra') Groups," was a January 9, 1987 memorandum from Abramowitz to then-Deputy Director of Central Intelligence Gates indicating that Assistant Secretary of State Elliott Abrams had expressed concern about the possible involvement of Contras in narcotics trafficking and had requested an Intelligence Community study "on an urgent basis." The memorandum from Abramowitz indicated that Abrams wanted the study "to pull together all foreign and domestically-generated information that is available, rumors and all, and provide an assessment of the credibility of the charges." Further, the memorandum to Gates indicated:

The Assistant Secretary believes that it is essential that we know before the rest of the world if any of those whom we have funded are engaged in this business so that they can be expelled from the ranks of the resistance.

The Memorandum to Abramowitz was written under the auspices of the NIO/Narcotics and was drafted jointly by officers from the DO and the DI's Office of African and Latin American Analysis. In addition to DO reporting, the assessment relied heavily on DEA information. Six topics were addressed, including:

Allegations discussed in three disseminated DO reports of October, November and December, 1984 concerning Pastora, Adolfo Chamorro, Gerardo Duran, David Mayorga, and Jorge Morales;
Statements to FBI and DEA undercover agents by Orlando Bolanos, who claimed to be in command of an anti-communist movement in Nicaragua called the " Internal Front," that he planned to smuggle cocaine into the United States;

The Frogman Case, which involved Nicaraguan drug traffickers who had been apprehended in early 1983 while swimming ashore near San Francisco, including information indicating that an unnamed suspected drug trafficker had placed 51 calls to a telephone in the FDN office in San Francisco that was later learned to have been listed to one of the defendants in the case. The defendant's name was not given;
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Re: OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT

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PART 4 OF 4

"Suspicious activities" at Ilopango air base in El Salvador;

An allegation that Roger Herman, political director for the Contra group, KISAN, was involved in cocaine smuggling into the United States; and

Allegations that the ranches of "two [unnamed] U.S. nationals" in Costa Rica, were used to smuggle weapons to the Contras and cocaine into the United States.

The Memorandum prepared for Abramowitz concluded that there was "no indication that anti-Sandinista groups that have received or now are receiving support from the U.S. Government have engaged in drug trafficking to fund their operations." Moreover, according to the Memorandum, DEA and FBI officials, along with Intelligence Community leaders, said that "no credible information exists to support" allegations of Contra involvement in drug trafficking that "have surfaced over the past four years, particularly when renewed funding for the Nicaraguan insurgency was under consideration in the U.S. Congress."

The Memorandum also concluded that, if Contra organizations had unwittingly received donations from sympathizers who derived the funds from drug trafficking:

. . . our best judgment is that the donations probably reflected personal decisions on the part of the donor rather than an organizational effort on the part of an anti-Sandinista group.

Further, the Memorandum stated that "we have no information suggesting Pastora's personal involvement" in the alleged agreement between his associates and Miami drug trafficker Morales, but "he may have been aware of them given his apparently close association with these individuals."

A January 21, 1987 transmittal letter that ADCI Gates attached to the Memorandum when it was sent to Abramowitz indicated that the Memorandum was being released with two qualifications:

DEA Headquarters planned to follow up on the matter of the adequacy of a DEA investigation of alleged drug trafficking at Ilopango.

The U.S. Customs Service was investigating allegations by Mario Calero that crew members working for Southern Air Transport might have been involved in drug trafficking.
The transmittal letter concluded with the observation that:

. . . as future drug trafficking cases surface it is likely that we will see more assertions of Contra connections. Such assertions may take the form of self-serving stories by traffickers for use in their legal defenses as well as allegations by the Sandinistas to discredit the insurgents.

According to a senior DI officer, Gates made it clear in commissioning the Memorandum that the issue raised by Abrams and Abramowitz must be addressed "head on and let the chips fall where they may." This officer recalls that the core judgment of the analysts involved in producing the Memorandum was that only a handful of Contras might have been involved in drug trafficking. No one believed, he recalls, that there was a major conspiracy or drug trafficking network at play. Concerning the Ilopango issues, the senior DI officer states that DEA had sent a DEA officer to El Salvador to investigate and the officer had concluded there was no substance to the allegations.

A March 31 1988 MFR by OCA Director John Helgerson indicated that SSCI Staff Director Sven Holmes had been provided a copy of the January 21, 1987 Memorandum that had been prepared for Assistant Secretary of State Morton Abramowitz.

To what extent did CIA share information with Congress regarding allegations of drug trafficking on the part of individuals, organizations, and independent contractors associated with the Contras? (39)

CIA records indicate that CIA notification to Congress regarding allegations of drug trafficking occurred primarily in response to congressional inquiries until 1984 and did not focus on the Contras specifically. For example, on July 14, 1982, DDCI John McMahon testified before the SSCI concerning the issue of "United States Government Current and Projected Efforts on International Illicit Drug Trafficking." The questions posed to McMahon at that time by the SSCI Staff related to the overall Intelligence Community strategy and reporting responsibilities concerning the narcotics issue. The relevant portions of the SSCI transcript of this hearing contained no explicit references to any connection between the Contras and drug trafficking.

DO "Nicaraguan Program Summary" Information. As mentioned earlier, three intelligence reports were disseminated by the DO to senior officials in the intelligence and law enforcement agencies between October and December 1984. These reports indicated that senior Southern Front leaders associated with Eden Pastora had concluded a mutual assistance agreement with Miami-based drug trafficker Jorge Morales. During the fall of 1984, the information provided was also reported in a CIA publication titled the "Nicaraguan Program Summary," a weekly report that was provided to the SSCI at its request. The weekly publication emphasized military activities, but also reported information about "funding, arms and other materiel assistance obtained by the Contras from (or promised by) third governments and private sources."

The information first appeared in the DO "Nicaraguan Program Summary - Week Ending 21 October 1984," dated October 24, 1984. This edition included a special entry entitled "Private Support" that stated:

Adolpho [sic] Chamorro and Marco Antonio Aguado said that the FRS had obtained in early October 1984 two helicopters and one fixed wing aircraft. This support was reportedly the result of Chamorro's and Aguado's recent trip to Miami to secure funds and material support for the FRS.

Another DO "Nicaraguan Program Summary - 14-28 October 1984," dated October 28, 1984, provided additional information to the SSCI:

Unconfirmed reports have been received which tie Pastora and several command-level members of his organization with [sic] drug smuggling operations in the United States. According to these reports, the FRS reached an agreement with an unidentified Cuban narcotics trafficker in Miami to provide operational facilities in Costa Rica and Nicaragua plus assistance with Costa Rican Government officials in obtaining documentation. In exchange, the FRS would receive financial support, aircraft, and pilot training. We have relayed this information to appropriate law enforcement agencies and will apprise the Oversight Committees of additional developments.

The DO "Nicaraguan Program Summary - Week Ending November 11, 1984," dated November 11, 1984, provided still additional detail:

In late October 1984, negotiations were allegedly completed whereby a Colombian narcotics trafficker would support the FRS with funds and aircraft in exchange for the use of FRS pilots in the drug trafficker's narcotics activities. Under the terms of the agreement, the FRS would provide an unspecified number of pilots for use in narcotics transportation in exchange for the loan of a Cessna 404 aircraft for use in FRS military operations in Costa Rica and El Salvador as well as monthly payments of U.S. $200,000. Information at this time suggests that this drug operation is part of the activity previously described in the last Nicaragua Program Summary. We are in the process of acquiring additional details and are coordinating future actions with the Department of Justice.

Other Information Sharing with Congress. On January 29, 1985, the Agency forwarded to Steven Berry, HPSCI Associate Counsel, a response to a question he had raised regarding Pastora's possible consummation of a working arrangement with Colombian drug dealers. The Agency response noted that "all relevant details have been reported in the Nicaraguan Program Summary." The response added that:

To summarize . . . intelligence reporting indicates that members of Pastora's organization (FRS) have agreed--either with Pastora's direct knowledge or tacit approval--to provide pilots and landing strips inside Costa Rica and Nicaragua to a Miami-based Colombian drug dealer in exchange for financial and material support. Information pertaining to Pastora's involvement in drug trafficking has been forwarded to the appropriate Enforcement Agencies.

On January 6, 1986, the SSCI requested Agency comments concerning a December 27, 1985, Washington Post article entitled "Nicaragua Rebels Linked to Drug Trafficking." A similar request was levied the next day by HPSCI Staff Director Tom Latimer. CIA's reply to both Committees was provided on January 22, 1986 in a letter signed by ADCI McMahon. The letter described the Agency's knowledge of Adolfo Chamorro's involvement with Morales, provided information about other contacts Chamorro had with suspected drug traffickers and offered a briefing concerning Chamorro's activities. In addition, the letter mentioned Gerardo Duran's arrest in Costa Rica and Duran's connection to Morales.

According to a May 7, 1986 MFR prepared by Louis Dupart of CATF, CIA representatives met with Richard Messick, Chief Counsel of the Senate Foreign Relations Committee (SFRC), on May 7, 1986. Messick reportedly called the meeting to "permit members of Senator [John] Kerry's staff to outline in greater detail information which they had uncovered that pointed to violations of U.S. law"--primarily related to the activities of John Hull. According to this MFR, William Perry of the SFRC staff, Charles Andreae of Senator Richard Lugar's staff, and Ronald Rosenblith, Jonathan Winer and Dick McCall from Senator Kerry's staff represented the Congress. CIA was represented by John Rizzo, OCA Legislative Affairs Chief; George Jameson, Counsel to the DDO; and Louis Dupart, CATF Policy and Plans Chief. DoS was represented by William Walker, Deputy Assistant Secretary of State for Inter-American Affairs; Ambassador Duemling, Director/NHAO; and a representative from the DoS Office of the Legal Advisor. Representatives from Justice, FBI, and DEA also attended. The Dupart MFR concluded that:

. . . Overall, the meeting was not fruitful. Kerry's Staffers were unwilling to provide details or identify their sources. Without this information it was impossible to meaningfully rebut the allegations that have been made of violations of U.S. law.

According to a May 8, 1986 MFR written by a CATF officer, she, Rizzo, Dupart, and David Pearline, met with SFRC Chief Counsel Messick again that day to continue discussions about Senator Kerry's investigation:

Messick feels that Kerry's staff sandbagged him by not providing all of the relevant correspondence. He noted that he had received a letter written by the U.S. Attorney in San Francisco that refuted the [drug] charges that members of the [Contras] had been involved in drug smuggling.

The MFR also noted discussions in this meeting regarding the nature of the information that American journalists Tony Avirgan and Martha Honey had to support their allegations of murder, attempted murder and drug smuggling and the relationship of their witnesses to the Kerry investigation. According to the MFR, Messick said that:

[Senator] Kerry called Senator Lugar on 7 May . . . to request a five day hearing on his allegations . . . . Lugar was apparently not sympathetic and told Kerry that he will have time to air his information but will not have five days of hearings on his allegations alone. Messick said the hearing will be in early June and will probably be two morning sessions.

Additionally, the May 8, 1986 MFR stated that Messick was told that the FBI had "extensive information on the people who had been interviewed by Kerry's staff . . . . " Dupart reportedly told Messick that "[Dupart] could not discuss in detail the information provided by the Bureau" and that Messick "would have to go to the Bureau for the details." The MFR stated that the meeting lasted one hour and a half and "at the end it was agreed that we would keep in touch."

An August 1, 1986 MFR from Dupart to CATF Chief Fiers and the LA Division Chief recorded a July 9, 1986 meeting with HPSCI Staff member Mike O'Neil on John Hull. According to the MFR, the meeting was held in CATF Chief Fiers' office. Dupart wrote in his MFR that Fiers noted that:

We have no information of Hull having been involved in violations of U.S. law. Further, since we are not a law enforcement agency, we have not collected or sought any information on this. Consequently, while it is possible that Hull had in fact violated the law, we have no knowledge of any violations. We would have reported them to the Department of Justice per standard Agency procedures.

The MFR further stated that, in response to other questions from O'Neil, Fiers said that Pastora had voluntarily renounced his role as a resistance leader.

A March 5, 1987 MFR written by OCA's Robert Buckman indicated that Fiers and the ALA Deputy Director briefed SSCI members and staff concerning Nicaragua that same day. The MFR noted that those attending the briefing had been informed that "the BOS risked losing its U.S. aid if it did not fully sever its ties with Adolfo "Popo" Chamorro" because of his possible involvement in drug dealing.

An April 30, 1987 CATF MFR indicated that CATF Chief Fiers briefed the SSCI concerning the Nicaraguan program on the same date. According to the MFR, Fiers explained the allegations regarding Southern Front involvement with drug trafficking dating back to late 1984. Fiers stated that, on learning of the arrangement that was made between Jorge Morales and senior ARDE leaders, CIA had "turned [the matter] over [to] DEA." The MFR also stated that Fiers had added that Octaviano Cesar--brother of BOS leader Alfredo Cesar--had a close relationship with Morales and that Cesar was questioned when this connection became known and Cesar's answers caused CIA to conclude that Cesar was probably involved in drug trafficking. Further, Fiers told the SSCI that the DO had learned that one of its air crew subcontractors was under indictment in Detroit and that CIA was now asking the FBI and DEA to run traces on all subcontractors involved in the Contra program.

CIA received a letter from Representative Charles B. Rangel, Chairman of the U.S. House of Representatives Select Committee on Narcotics Abuse and Control, dated May 14, 1987, requesting information concerning Contra drug trafficking as a result of media allegations. A May 28, 1987 response by the CIA Director of Congressional Affairs, David Gries, denied "any allegation that the Agency was involved in drug trafficking in support of the Contras."

A July 15, 1987 memorandum from OCA Officer Robert Buckman to OCA Director Gries, stated that convicted narcotics trafficker Jorge Morales had testified that same day before the SFRC Subcommittee on Terrorism, Narcotics, and International Operations regarding Contra drug trafficking and gun running. The memorandum stated that Morales had implicated the Agency in drug trafficking, but the memorandum did not describe any specific allegations by Morales.

After Morales' appearance before the SFRC Subcommittee on Terrorism, Narcotics and International Operations, Fiers was called to testify before the SSCI on July 31, 1987. According to the SSCI transcript of that testimony, Fiers summarized CIA information concerning possible Contra involvement in drug trafficking. In his opening remarks, Fiers stated:
What we have found to date is that none of the people currently involved in the resistance leadership, armed or political, have any--we have uncovered no indications that any of these individuals are involved or have been involved in narcotics trafficking.

Fiers noted, however, that there was one resistance leader--unnamed by Fiers--who might be involved in trafficking and that he was under "active investigation."(40)

Fiers added in his testimony that:

We have a significant body of evidence with regard to involvement of the former members of ARDE in the Southern Front--Pastora's people--being directly involved in cocaine trafficking to the United States and as part of an effort to maintain and fund their organization during the period of cutoff after May of 1984.

Conversely, we have never found any evidence indicating that the FDN or those around the Northern Front, as it is known today, have been involved in cocaine or any drug dealings, and we have looked very closely at that . . . .

I believe personally, based on the evidence that I have seen, that there is a basis in fact for the claims that Jorge Morales has made in his testimony and in his public statements, that he was involved with members of ARDE in cocaine smuggling.

We first began to develop information on that involvement in October of 1984. There were some vague indicators of problems prior to that in the 1983 time frame, but nothing specific.

Also during his July 31, 1987 SSCI testimony, Fiers described what was known to CIA about narcotics allegations concerning the unnamed resistance leader and Contra-related personnel Marcos Aguado, Octaviano Cesar, David Mayorga, Adolfo and Roberto Chamorro, and Gerardo Duran.

An August 3, 1987 OCA MFR by Buckman recorded a meeting of SSCI and OCA officers that day. Attending for the SSCI were Staff Director Sven Holmes, Jim Dykstra, Dave Holliday, Keith Hall, and Britt Snider. David Gries, Al Dorn, and Robert Buckman represented OCA. According to the MFR, Holmes questioned CIA's use of [name deleted] in the Contra supply program in light of allegations of drug-related activities by [this person]. The MFR indicated that Fiers was contacted by telephone during the meeting and reportedly stated that Agency policy was that persons such as [this person] could be used in the Contra program if there were no ongoing investigations of wrongdoing or no outstanding indictments.

An October 14, 1987 OCA MFR indicated that in a briefing to the SSCI Staff on that same day, Fiers provided SSCI Staff members additional information about a Contra leader who might be involved in drug trafficking and to whom Fiers had referred in his July 31 testimony. He told Staff members that regarding the Contra leader--Jose Davila--as a result of questioning by CIA Security, there were major concerns regarding narcotics-related issues.

A December 22, 1987 letter from DCI Webster to Senator Kerry of the SFRC stated that Webster:

. . . welcomed the opportunity to meet with you and discuss your concerns about John Hull and your request for assistance in the Subcommittee's narcotics investigation. This is the kind of open and unencumbered exchange that I believe we must have between the Agency and Congress.

The Webster letter also stated that:

Concerning John Hull, I can assure you that he is not receiving any support from the Agency, and we have no reason to believe that any other element of the United States Government is supplying such support. As you will recall, you were briefed on John Hull on 15 October 1986 following the Hasenfus crash. My staff is prepared to provide you with an update if you wish.

The Webster letter also stated that Webster wanted to assure Senator Kerry "once again that you will enjoy this Agency's fullest possible cooperation during the course of the Subcommittee's investigation."

John Helgerson, Director of the Office of Congressional Affairs from January 1988 to March 1989, says that CIA attempted to comply with requests for information from committees of Congress--such as the SFRC--other than the intelligence oversight committees by coordinating the requests and Agency responses. He says:

We in OCA worked over an extended period of time with the SSCI staff to identify what they thought to be information appropriate to the needs of the non-intelligence committees. To the extent of my knowledge, we provided that without reservation [and] considered that "full disclosure" as it fully met the requests of those committees legitimately engaged in the oversight of the CIA.

A January 4, 1988 OCA MFR by Buckman indicated that CATF provided a summary briefing for SSCI concerning the Nicaraguan program on the same date. At the briefing, Senator Bill Bradley inquired about allegations of drug trafficking, and Fiers responded that "Pastora had been involved with Colombian trafficking but that the FDN was clean."

A February 2, 1988 OCA MFR, regarding a January 27, 1988 meeting, indicated that Senator Pete Wilson of California was briefed by CATF regarding allegations of human rights abuses and drug trafficking by the Contras. According to the OCA MFR, Senator Wilson was informed by a CATF officer that:
. . . we look into the allegations periodically and are assured that there is no drug running going on among groups the US supports. We have had some evidence that two people close to Pastora were implicated in drug trafficking in 1984.

A March 31, 1988 MFR by OCA Director John Helgerson indicated that SSCI Staff Director Sven Holmes had been provided a copy of the January 21, 1987 memorandum that had been sent by ADCI Robert Gates to Assistant Secretary of State Morton Abramowitz. The memorandum, entitled "Assessment of Alleged Connections Between Drug Traffickers and Anti-Sandinista ('Contra') Groups," was reportedly coordinated through the Intelligence Community and DEA and contained an assessment of alleged Contra-related narcotics trafficking. It concluded that "no credible information exists to support" allegations of Contra involvement in drug trafficking that had been made over the previous four years.

A February 23, 1988 OCA MFR documented one of a series of weekly meetings between OCA representatives and SSCI Staff members. These meetings resulted from a request for information by Senators Kerry and Pell of the SFRC, via the SSCI, for documents relating to the Contras and drug trafficking. The MFR stated:

A meeting has been held between Senator Kerry with [sic] Senator Boren . . . to arrange for SSCI to acquire Agency records on allegations that profits from drug trafficking were channeled to the Contras. Senator Kerry claimed that there were CIA cables which had not been released to the Iran/Contra Congressional investigation.

A March 14, 1988 letter from Senator Pell to Senator Boren referred to discussions between SFRC and SSCI Staff members. The letter stated that "the CIA has a number of documents in its files relating to narcotics and the contras. Specifically, these documents consist of cables to and from Central America which originated with the CIA." The letter made a SFRC formal request to the SSCI for assistance in gaining access to "the above mentioned documents."

A March 15, 1988 OCA memorandum from OCA to a DO Legal officer and LA Division asked for a status report regarding a request from Senator Kerry for Agency information concerning Contra financial support from drug trafficking. The memorandum stated that LA Division was supposed to be reviewing cables Kerry claimed had not been released to the Iran-Contra congressional investigation.

A March 22, 1988 MFR by OCA officer Buckman described a meeting with SSCI Staff members who again asked about the status of Senator Kerry's request for documents relating to the Contras and narcotics. According to the MFR, the SSCI interpreted the request to include "all cable traffic relating to narcotics and Panama, Costa Rica, Nicaragua, Cuba, the Contras, and [John] Hull."

A March 24, 1988 memorandum from OCA Director Helgerson to DDO Richard Stolz, DDI Richard Kerr, the LA Division Chief , and three other component officers noted that Senators Kerry and Pell and the SSCI Staff were seeking information concerning narcotics reporting--specifically "CIA cable traffic [operational traffic and DO intelligence reports] on . . . the Contras and drugs." The memorandum commented that "realistically, we are likely to have to respond somehow--fairly quickly--to the Kerry and Pell requests regarding when we knew what, without passing raw reporting or operational traffic to the SSCI." The memorandum then outlined a strategy of providing DI finished intelligence products, rather than raw reporting, to the SSCI.

A March 31, 1988 MFR by OCA Director Helgerson summarized a meeting with SSCI Staff members on March 29, 1988. The MFR stated that Helgerson provided the SSCI with a collection of materials that responded to the Kerry and Pell requests. According to the MFR, Helgerson pointed out to the Staff members that the collection did not include relevant material that had already been passed to the SSCI and consisted of, for the most part, finished intelligence products that reflected "all significant, substantive information available to the Agency on the questions raised by the Senators." The MFR said that the Helgerson noted that the package:

. . . did not include, and we have been unable to identify, any significant new body of CIA information not previously passed to the Congress, such as is alleged to exist by Senators Kerry and Pell . . . . We at CIA are committed to no further action at this point, but I have no confidence that the subject will not come up again fairly soon.

"Talking Points," dated April 14, 1988, were prepared for DCI Webster's use with Senators David Boren and William Cohen regarding Senator Kerry's request to see all CIA cable traffic concerning the Contras and drug trafficking. Attached to the talking points was an April 1, 1988 MFR that summarized CIA's efforts to satisfy Kerry's request by providing him with finished intelligence products. Also contained in the Talking Points were two options to resolve the issue. One was to "ask the I[nspector] G[eneral] to review all relevant materials, including operational cable traffic. The DCI could offer to report on the IG's findings to the Intelligence Committee." The other was to assist the SSCI Staff in conducting its own in-depth review by providing "the detailed information on the Central American and other narcotics problems" to a member of the Staff. The Staff would have to obtain additional information from the other relevant agencies, such as DEA, to accomplish its review, according to the Talking Points.

A March 28, 1988 memorandum from DDCI Gates to DDI Kerr and DDO Stolz asked that a briefing concerning Contra involvement in narcotics-related activities be given to the HPSCI and SSCI on April 1, 1988. The material prepared for that briefing as a result of this request included: (1) a narrative entitled "Allegations of Resistance Activities in Narcotics Trafficking," which stated that, "All allegations implying that the CIA condoned, abetted or participated in narcotics trafficking are false;" (2) a copy of a March 31, 1988 memorandum entitled "Pilots, Airlines and Shipping Companies Used in Resupply Efforts That May Have Had Past or Current Ties to Narcotics Related Activities;" (3) a July 31, 1987 MFR prepared by a DO officer that recorded Alan Fiers' July 31, 1987 testimony to the SSCI/HPSCI Staff regarding Contra Narcotics Trafficking Allegations; and (4) seven documents that provided information concerning the following Contra-related individuals and organizations--Mike Palmer, Octaviano Cesar, Aldofo Chamorro, Barry Seal, Marco Aguado, Markair, Sebastian Gonzalez, and David Mayorga. No information has been found to indicate whether this specific briefing was provided to the SSCI or HPSCI by Gates or any other Agency official.

A May 3, 1988 OCA MFR summarized a meeting on April 22, 1988 between Dewey Clarridge and two Staff members of the House Judiciary Committee's Subcommittee on Crime. The MFR stated that Clarridge was interviewed regarding his knowledge of drug trafficking by the Nicaraguan Government or the Contras. According to the MFR, Clarridge discussed CIA's assistance to a 1984 DEA sting operation that resulted in the indictment of Federico Vaughn, an aide to Nicaraguan Interior Minister Tomas Borge, as a co-conspirator in a scheme to smuggle drugs into the United States. Clarridge reportedly was also asked a series of questions regarding alleged Contra involvement with drug smuggling. The MFR stated that Clarridge responded that these allegations arose after he left DO/Latin America Division--he was Chief of that Division from 1981 to 1984--and he was not in a position to comment on them.

A May 18, 1988 letter from the Chairman and Vice Chairman of the SSCI to DCI Webster informed Webster that the SSCI was initiating an inquiry into "those aspects of the narcotics trafficking problem in Latin America that fall within the Committee's jurisdiction." The letter also conveyed a set of questions regarding Agency policy and procedure in general. One question focused specifically on Contra linkage to drug trafficking:

When intelligence indicated drug involvement on the part of a Contra or Contra-[sic] supply personality or of a high-ranking military officer (e.g., in Honduras, Haiti or Panama), was this information highlighted for policy-makers in DEA, State and DoD, or brought to the attention of the National Drug Enforcement Policy Board (NDEPB) or an appropriate committee thereof? Did the handling of information pointing to US allies differ from that regarding our adversaries?

(Underlining in original.)

A June 9, 1988 DO MFR documented a June 8, 1988 meeting between SSCI Staff members and CIA personnel to review the questions the SSCI inquiry was going to address. The MFR indicated that the specific question regarding Contra linkage to drug trafficking "refers only to specific persons whom [CIA] can identify." The CIA's answer to this SSCI question was provided in a July 6, 1988 memorandum that stated:

There were a few raw intelligence reports from DO field stations which indicated Contras or contra-supporters may have been involved in illegal narcotics trafficking. These reports were disseminated through regular intelligence channels to senior policymakers, including those at State, DIA, NSA and other appropriate agencies.

On February 22, 1989, shortly after November 1988 allegations of drug trafficking by Juan Ramon Rivas Romero--a Northern Front Contra leader who had been jailed for drug trafficking prior to his association with the Contras--Deputy General Counsel for Operations John Rizzo advised DDO Stolz that:

I agree that it would be prudent to advise HPSCI and SSCI of this matter, although I should note that when I mentioned this to John Helgerson last week his initial reaction was that the whole thing was too dated and trivial to warrant telling the committees . . . .

My only suggestion is that if and when we notify we do it low-key and on the staff level, since I don't think we have anything to be defensive about.

A March 10, 1989 MFR from OCA Deputy Director for Legislation John Golden advised OCA Director Helgerson that:

. . . the incident involving [Rivas] some 10 years ago may be viewed by some as being more than trivial. I noted that Norm Gardner [the Deputy Director, House Affairs, OCA] indicated [Rivas] had not been [questioned by CIA Security] on this issue and his current whereabouts are unknown. I recommended to John Helgerson that the Committees be informed of the fact that we recently learned of this matter and wish to bring it to their attention. It is understood that we have no reason to believe [Rivas] was involved in narcotics beyond the mentioned incident . . . . John Helgerson . . . . subsequently told me that he would have the committee staff so informed.

A March 15, 1989 CATF memorandum provided "Talking Points" for OCA use to brief the HPSCI and SSCI regarding Rivas. The memorandum outlined Rivas' involvement in drug activities in Colombia in 1979; his arrest, incarceration and escape; and briefly described his record as "the ERN/N[orth]'s most capable commander." It also noted that:

Rivas is not on the Drug Enforcement Administration (DEA) "watchlist," and, according to DEA, there is no indication that Rivas is currently involved in illicit drug activity. Further, DEA considers the information on Rivas "historical" . . . .

According to a March 15, 1989 MFR by OCA Deputy Director for Senate Affairs Buckman, SSCI Staff member David Holliday had been briefed that day concerning Rivas. Holliday reportedly had been informed that the Department of State had determined that Rivas "should be removed from his post and that Resistance leaders agreed." The same memorandum noted that Holliday stated "that he would inform the Committee. He did not regard this as a serious matter." According to a March 16, 1989 MFR drafted by OCA, HPSCI Staff member Mike O'Neil was briefed telephonically on the same date regarding Rivas. The MFR noted that O'Neil "appreciated the briefing but had no real comments or remarks to make."

A March 16, 1989 briefing paper entitled "Outline for HPSCI Political Action Briefing on 17 March 1989" stated that CATF would brief HPSCI Staff members on March 17 regarding a list of topics. A March 28, 1989 CATF MFR reported that this briefing was accomplished on March 17, 1989 by the CATF Chief of Operations to HPSCI Staff members Dick Giza, Mike O'Neil, Duane Andrews, and Steve Nelson. The MFR also reported that the Chief of Operations briefed the HPSCI Staff members about allegations of drug trafficking concerning Rivas. He reportedly informed the Staff that the Department of State had decided that Rivas would be "separated from the Resistance" and that State had informed Contra leader Enrique Bermudez of this decision on March 14. In response to a question concerning U.S. Government support for Rivas, the Chief of Operations reportedly said that CIA was not planning to assist in resettling Rivas, that Rivas may have received family assistance funds from the Agency for International Development and that Rivas had never received a salary from the CIA.

Individual Statements. John Stein, DDO from July 1981 to July 1984, says that he was not involved in the Contra program as DDO. DCI Casey and LA Division Chief "Dewey" Clarridge ran the Contra program but would keep him informed. Stein says he knew enough to brief Congress since Casey "was not welcome" in Congress to discuss this matter.

The CATF Deputy Chief and Chief from 1982 to 1984, states that the HPSCI was kept fully informed of significant events in the Contra program on a weekly or biweekly basis. He does not recall allegations of drug trafficking by the Contras during his tenure, but notes that such allegations would have triggered "alarm bells" because of the politically charged atmosphere at the time.

John McMahon, DDCI from June 1982 to March 1986, says that he did most of the briefings to Congress regarding "unsavory" issues, but does not recall briefing Congress regarding allegations of Contra drug trafficking. If there were a need to discuss issues in confidence, he would have done so with the Chairman and the Vice Chairman or Ranking Minority Member only. McMahon says that he would not let CATF do something that should not be done and that the ground rules were to be honest with Congress.

An officer who was CATF Chief from 1982-1983 and LA Division Chief from 1986-1989, responded to written questions from OIG and wrote:

. . . No . . . programs ever conducted by the Agency during my tenure was [sic] ever run as transparently as the Central American and Nicaraguan programs. Congressional members and staffers traveled frequently throughout the area and received extensive and detailed briefings on virtually every aspect of the program. Over a period of years the staffers became intimately familiar with the Contra program, and they would have been the first to call our attention to any problems in reporting on allegations of drug trafficking by Contras or Contra-related individuals.
. . . .
I do not remember participating in any briefing of Congressional members or staffers in regard to drug-related activities by the Contras or Contra-related individuals.

Robert Gates, DDCI from April 1986 to January 1987 and May 1987 to March 1989 and ADCI from January to May 1987, says the Agency had an obligation to terminate its relationship with any asset suspected by law enforcement agencies to be engaged in drug trafficking. Gates says that he would not have made an exception and allowed the use of an asset who had past or present involvement in drug trafficking without getting it cleared through Congress and DoJ. Gates notes that, with the Agency's involvement in the Iran-Contra affair, it "needed to be purer than Caesar's wife."

After the $100 million congressional funding authorization in 1986, Gates says there were many legislative enactments that affected the Contra program--what could or could not be done--and constant discussions with congressional staff members who were closer to the issues than individual Committee members. Gates says he went directly to the Chairman or Vice Chairman of the intelligence oversight committees when something was particularly sensitive. As ADCI, Gates says he met with the Chairmen or Vice Chairmen every two to four weeks, discussing a long list of items. According to Gates, representatives of the Agency's Office of Congressional Affairs accompanied him and wrote extensive memoranda of these meetings.

Richard Stolz, DDO from January 1988 to December 1990, says he recalls no drug trafficking connection to the Contras. According to Stolz, the Agency's Counternarcotics Center took the lead in briefing Congress on counternarcotics matters.

Current DCI George Tenet recalls that the SSCI held quarterly hearings on certain CIA activities while he was serving as an SSCI Staff member and Staff Director. Additionally, Tenet recalls that Senator Bill Bradley was personally interested in Nicaragua, received weekly or biweekly briefings on Nicaraguan covert action matters and regularly met with CATF Chief Alan Fiers and other U.S. Government policy officials regarding Nicaragua. Tenet does not, however, recall any briefings of the SSCI by Fiers concerning allegations of Contra involvement in narcotics trafficking.

James Dykstra, former Minority Staff Director for the SSCI, says that biweekly briefings regarding the Contras were held at the request of Senator Bill Bradley who was the only Senator who regularly attended these briefings. Dykstra recalls that the Agency initially resisted the biweekly briefings and recorded transcripts, but ultimately agreed. Dykstra says that, in retrospect, it was good that Senator Bradley insisted on transcripts so issues were placed on the record. Dykstra recalls that Fiers also regularly briefed the SSCI Staff.

Dykstra says that 1986-1987 was a "time of tension" due to the controversy over an Intelligence Oversight Bill. Dykstra says that former DCI William Casey also had strained relationships with Senator David Durenberger--then Chairman of the SSCI--and others in that time period. Dykstra says that, with all this tension, however, Fiers had developed an informal, friendly relationship with all the Senators and SSCI Staff members.

Then-OCA Director John Helgerson states:

. . . I did not undertake to provide all raw reporting of the DO to non-intelligence committees. I did work with the SSCI [Staff Director Sven Holmes] to provide other committees [sic] members with the material we and the SSCI judged met their needs within the limits of the guideline set by the DCI & [sic] DDO.

. . .

The general DCI & DDO policy was to provide no raw traffic to non-cleared people on non-intell[igence] Committees. I recall that perfectly. [Concerning the Kerry SFRC subcommittee request for CIA documents] we (CIA) and the SSCI negotiated some exceptions designed to meet the legitimate needs of the Congress. Most of the limited raw traffic shown was shown to the SSCI; less to non-SSCI staff.

. . .

The DCI's policy, and mine, was to give the SSCI & HPSCI everything appropriate to their inquiries. When requests came from those (oversight) committees for cable traffic and/or raw reports, we (DCI, DDO & me) negotiated with the Committees regarding what, exactly, they needed, & to my memory met their needs. When requests came from non-oversight committees, we negotiated with the SSCI and/or HPSCI on how best to respond.

Helgerson says that his role as Director/OCA was to make sure that the appropriate DO and DI officers "hooked up" with Committee and Staff members to provide substantive briefings regarding the Contras as required. He states that OCA, however, relied on Agency components to provide full and accurate information to Congress. Helgerson does not recall briefings regarding Contras and narcotics trafficking." Helgerson notes:

I do recall more general questions about Noriega, Contras, and drugs. Very few of these questions originated with the oversight committees--they were primarily passing on the questions of others, as I recall.

Helgerson says that Senators John Kerry and Claiborne Pell, who were not on the SSCI, were driving SSCI Staff Director Sven Holmes and the other SSCI Staff members on the issue of Contras and narcotics. He says that the SSCI Members and Staff were not "taken" with the topic and were very frustrated by the tasking from Senators Kerry and Pell. Helgerson says that he recalls there were two problems from an Agency perspective. First, there was virtually no guidance from Senators Kerry or Pell in terms of the specific information they wanted regarding drugs and Contras --that is, Kerry and Pell were on a "fishing expedition" and would ask "Give us everything you've got" which was too broad. Second, he does not recall how much "raw traffic" could be provided in summary and how much could be provided to the non-cleared people working on the Kerry subcommittee. He says that he recalls that Agency officers sometimes showed documents to the Kerry Staff members in the SSCI secure office space.

Helgerson says that he does not recall a concerted effort by the Agency to get to the bottom of the allegations of narcotics trafficking. The Agency, as he puts it, was in the intelligence business, not law enforcement.

Helgerson says that he was never comfortable that he was providing the intelligence oversight committees with everything the Agency had on a particular issue because the Agency's information on any subject was held in multiple files and data bases and OCA had to rely on the DI and DO to conduct thorough searches and provide complete responses. He says he was less comfortable with DDO Clair George than with Richard Stolz who succeeded George as DDO in January 1988. Stolz, he recalls, encouraged a "much more cooperative attitude" in the DO's dealings with the Congress. However, he says he is not aware of any decision to withhold cable traffic from SSCI or HPSCI Staff members.

Helgerson says that OCA representatives were not always present at all briefings of the committees, particularly CATF matters in which Fiers enjoyed great autonomy. Fiers, according to Helgerson, often dealt directly with the DDO and even the DCI. As to whether SSCI and HPSCI Staff members could make decisions or provide advice to Agency briefers on sensitive issues without consulting the Chairmen or Ranking Minority Members, Helgerson says that he was amazed at the level of sensitive issues on which Staff members rendered judgments.

An officer who was a Central American COS from 1987 to 1989 and LA Division Chief 1989 to 1992, states in a written response to OIG questions that there was "constant" communication with the oversight committees during the time he was involved in Central American matters. He recalls that Staff members came to CIA Headquarters regularly for briefings and frequently visited field stations.

Richard B. Still

CONCUR:
L. Britt Snider
Inspector General

Date 10/8/98
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Re: OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT

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APPENDICES

Appendix A

Jack Terrell

Background. Jack Terrell alleged that John Hull and the Contras were involved in drug trafficking. He also alleged that there was a plot involving Contra supporters to assassinate a U.S. Ambassador on behalf of Colombian drug traffickers. No information has been found to indicate that Jack Terrell had any contact with CIA or that CIA had any information indicating Terrell was involved in drug trafficking with the Contras.

CIA Records A January 28, 1986 cable to Headquarters requested traces concerning Terrell and stated:

. . . according to the local [FBI, Terrell] claims to have contact with [CIA] by virtue of his service with the Nicaraguan Democratic Force in Honduras and Nicaragua from 1984-85. . . . [Terrell] said he is known . . . by his nom de guerre of "Flaco." . . . [Terrell] has identified his [CIA] contact as one "Rob Owens."(1)

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

. . . In March 85 he and 13 other [American citizens] associated with CMA were asked by [the American] Embassy to return to [the continental United States] from the Mosquito [sic] where they allegedly were planning to enter Nicaragua to blow up a bridge. The group including "Flaco" were [sic] repatriated to [continental United States] two days later. [Terrell] was not in contact with [CIA].. . .

A March 24, 1986 FBI telex to CIA provided information from an FBI New Orleans office March 17, 1986 interview of Terrell. Reportedly, Terrell told the FBI that there had been several meetings in the Miami area between December 9 and December 23, 1984 involving CMA members--including Terrell--and Contras Stedman Fagoth and Wycliff Diego. According to Terrell, he was discussing tactics to be used by the Contras when he was called out of the meeting by the leader of the CMA, Tom Posey, to meet a person called "Corbo," who could provide the CMA with money, weapons, transportation, and "everything we've been looking for." Those who had been discussing tactics with Terrell allegedly became angry and told Terrell, "You don't want to meet with [Corbo] because he is into drugs and arms and he works directly for Francisco Chanes." Terrell also reportedly told the FBI that Posey had arranged for him to meet with Francisco Chanes who offered a million dollars if the CMA would assist in the sale of frozen lobster imported from Costa Rica. According to Terrell, a U.S. citizen associate of John Hull, was also present at this meeting.

An April 4, 1986 Headquarters cable to the FBI provided traces regarding Terrell and persons mentioned by him in his FBI debriefing:

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

On April 11, 1986, an article in The Washington Post stated that:

Jack Terrell, who was a leader of the American paramilitary group . . . CMA, said FBI agents and prosecutors from the U.S. attorney's office in Miami have met with him several times with at least two of those sessions becoming full-day meetings. Terrell said the investigators asked him about alleged weapons shipments from the United States to contra base camps in Central America, contra involvement in drug smuggling, and a reported conspiracy to assassinate the U.S. ambassador to Costa Rica, Lewis Tambs.

An April 15, 1986 cable to Headquarters commented that Terrell had made "scurrilous attacks on [CIA]".

A May 8, 1986 FBI telex to CIA and other U.S. Government agencies reported that the FBI had attempted "to locate Jack Terrill [sic] at his residence" in New Orleans. The owner of the apartment building where Terrell lived and where he served as building manager and handyman had reportedly said that:

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

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

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

An unsigned memorandum, with a handwritten date of July 18, 1986 and entitled "Traces on Jack Terrell, a.k.a. Colonel Flaco," stated that information was provided that there was:
a call from Terrell who called from Senator Kerry's office. . . . Because of FBI interest in the whereabouts of Terrell, we informed the Bureau's Counterterrorism Planning and Special Investigations Office at a 2 May meeting that Terrell was in the Washington area and had met with Senator Kerry's Staff. . . .

A July 31, 1986 cable requested traces concerning Terrell on behalf of the FBI. According to the cable, the local FBI office had provided a copy of a report from an FBI office indicating that Terrell had contacted the FBI in Houston, Texas,:

. . . offering to provide information on Central American groups, Iranians and African National Congress (ANC) principals. [FBI] interviewed [Terrell] in August 1985 and again in February 1986. Terrell provided in-depth details on the "La Tronquera" training camp along the Nicaraguan border with Honduras.

A September 29, 1986 cable to Headquarters reported that a FBI Washington Field Office Special Agent had advised that the FBI interrogated Terrell in the course of an investigation concerning a threat to the President. According to the cable, Terrell told the FBI that:

. . . he had recently returned from Manila where had had been offered one million USD[ollars] to establish a radio station for the New Peoples' Army by the head of the Communist Party [sic]. [Terrell] asked the case agent to put him in touch with [CIA] so that he might relate the story directly to those involved. . . . [Terrell] works for the Center for Developmental Policies . . . [in] Washington DC.

A March 29, 1988 Headquarters cable provided a draft of a memorandum that Headquarters proposed to distribute to the FBI and several U.S. military organizations as "a summary of all the information [CIA] has received on . . . Terrell since January 1988. . . ." The cable detailed Terrell's involvement with an insurgent leader of the Kachin Independence Organization based in Northern Kachin State, Burma. The cable also noted that "in Burma and Thailand Terrell is advertising himself as a former [CIA] officer." Finally, the cable stated that Terrell has recently arrived in Manila and rented an apartment.

An April 6, 1988 memorandum from the DDO to the Director of the FBI and several U.S. military organizations included the information that was reported in the March 29 cable. The first paragraph of the memorandum stated that "The CIA has no involvement in Terrell's activities nor do we want any type of relationship with him." The memorandum also included the statement that "Terrell has never been employed by CIA." Most of the memorandum recounted a briefing provided by a U.S. Marine who was an intelligence officer serving at the Marine Barracks at Subic Bay. The Marine officer recounted that Terrell had offered his services to an insurgent group in Burma and claimed to be a former CIA officer. The Marine officer reportedly had received his information from a former Marine who was associated with Terrell and also directly from Terrell.

An August 23, 1988 Washington Post article mentioned that Terrell had been indicted along with Mario Calero and other Contra supporters for violations of the U.S. Neutrality Act. A July 14, 1989 Washington Post article reported that a federal judge had dismissed the Neutrality Act charges.

On June 12, 1991, U.S. Embassy Manila reported a plot to assassinate a rebel military leader involving the Philippine Foreign Secretary, Raul Manglapus, and an American. Key evidence of the plot was reportedly a tape recording of a purported discussion of the assassination plot between the Foreign Secretary and the American. An October 8, 1991 cable identified the American as Jack Terrell.

An October 9, 1991 draft DoS cable stated that DoS officers had met with the FBI on October 8 and were told that the American involved in the plot:

. . . has been an asset of the FBI in a number of cases. When polygraphed in connection with this case and asked whether the other voice on the tape was that of foreign secretary Manglapus, his response was described as indicating deception (this tends to confirm our initial judgment that this affair is a hoax of some kind.)

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

An October 17, 1991 U.S. Embassy Manila telegram to the DoS described a meeting between Manglapus and the American Ambassador. According to the telegram:

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

A column in the October 25, 1991 edition of the Manila Inquirer reported an interview of Terrell's Manila neighbor who had said:

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

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

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

In 1992(2) Terrell wrote:

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

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

Appendix B

Frank Castro

Background. No evidence has been found to indicate that Frank Castro was a member of the Contras . However, information has been found connecting Frank Castro to the Contras and cocaine trafficking. An April 20, 1990 memorandum provided background information on Castro. The memorandum noted that a biographic questionnaire, in Spanish, asked Castro "in what military service, including the 2506 Brigade (Bay of Pigs) have you participated?" According to the memorandum, Castro answered that he had participated in U.S. Army training at Forts Knox, Jackson and Carson and that:
. . . .
21. . . . . because of this question being answered, a misconception took place and it was reported in Castro's file, that he was part of the 2506 Brigade. According to the files of this Directorate, [Frank Castro] did not work for the CIA during the Bay of Pigs Invasion, nor has he ever been an employee of the CIA in any capacity . . .

Eulalio Francisco Castro Paz was born in Cuba on June 4, 1942 and came to the United States, probably in 1961, seeking political asylum. He served in the U.S. Army from November 5, 1962 through December 6, 1963. He changed his name to "Frank Castro" and became a naturalized U.S. citizen sometime during 1971. In the early 1970s, Frank Castro was involved in anti-Fidel Castro activities that included bombings and attempted bombings of Cuban and Soviet facilities.

During the 1970s and 1980s, CIA cooperated with the FBI and other U.S. law enforcement entities in monitoring and reporting on Frank Castro's movements and activities. By 1983, Castro's name began to appear in regard to Contra-related activities.

Allegations of Drug Trafficking. According to an October 12, 1983 cable:

On October 8, Frank Castro . . . revealed FDN interest in opening FDN front in Costa Rica, separate from ARDE. Castro . . . . [said] the FDN would be willing to provide info[rmation] on where they might establish bases, individuals they can trust, how they can operate without interference from [the Government of Costa Rica], etc.

In November 1983, according to a document captured by U.S. military forces in Panama City in December 1989:

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

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

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

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

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

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

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

On October 12, 1984, a cable reported that:

When queried ... about who controls "Rene," (a Cuban-American who has approximately 30-40 armed Nicaraguan combatants deployed in northern Guanacaste [Province], Costa Rica) [it was] acknowledged that Frank Castro of Miami controlled "Rene". . . . All available information indicates that the group under Rene's command is not presently associated with either the FRS or MDN/ARDE. Previous reporting indicated that approximately seven Cuban Americans were deployed with this unit which previously (early June) was located at "Monico," [Hull's] [landing zone].

According to an October 25, 1984 cable, John Hull said that Frank Castro had donated two helicopters, two light aircraft and one C-47 to the FRS. The cable suggested that the C-47, then located in El Salvador, might be the one that Marcos Aguado had at Ilopango and might be under Dominican Republic registration. According to the cable, Castro had moved from Miami to the Dominican Republic and recently provided an unspecified amount of money to the FRS. John Hull says that, according to Cuban-Americans, Castro gave a lot of money to the Contras and was rumored to be involved in the drug business.

On October 31, 1984, a cable reported that:

. . . personnel from the FRS, recently in Miami, had contacted Frank Castro and [another non-U.S. individual], the latter reportedly is closely associated with Sarkis G. Soghanalian. Castro was reported as having "connections" in Colombia and the Dominican Republic, and was presently located in the [Dominican Republic].

According to a cable on December 10, 1984 it has been
commented that Frank Castro of Miami . . . continues to support Rene Corvo and his 40-60 man unit. Although no details were available, [it was] commented that Corvo may be involved in drug trafficking operations, supported by Castro.

A December 12, 1984, cable reported that:

. . . .

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

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

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

There are also fears that Corvo, who has received support from Frank Castro, may be exploiting the military infrastructure in northern Costa Rica as cover for engaging in drug trafficking. Castro, a Cuban-American based in Miami and well-known as an anti-Communist, may be involved in drug trafficking as well.

A February 8, 1985, cable reported that an FBI Special Agent had questioned Moises Ruiz Nunez:

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

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

A June 1, 1985 cable referred to Frank Castro as a known narcotics dealer and requested details linking Pastora to Castro, Jorge Morales and a third individual. A June 17, 1985 response to the request provided information about Castro's involvement in drug trafficking in 1979, the "considerable" amount of money that possibly came from Castro in July 1984 and the FRS' receipt of a number of aircraft from Castro in October 1984.

A January 2, 1986 cable responding to an FBI request for information concerning Frank Castro reported that Castro was a pilot and gave Castro's most recent address as the Bonnet Travel Agency in Hialeah, Florida. The cable also provided a recapitulation of CIA information concerning Castro's anti-Fidel Castro activities.

On March 7, 1986, an FBI cable reported to CIA allegations by Jack Terrell that, some time before February 1985, Frank Castro had presented himself as the representative of Colombian drug trafficker Ochoa who wanted a U.S. Ambassador assassinated and who offered to pay one million dollars to have it done. The cable noted also that Castro was the main liaison between Colombian drug dealers and the Cubans.

On April 15, 1986, a cable suggested that a review of certain reporting would show that some:

. . . consider Rene Corvo and Frank Castro as dangerous and counterproductive in the anti-Sandinista endeavor, however anti-Communist both may be. . . . [There have been] reported allegations that Castro may engage in drug trafficking. [Certain people] shun [Pastora], while Corvo and Castro have continued to support him.

In a November 5, 1986 cable, a specifically named individual was referred to as "a Cuban narcotics dealer . . . [known] to have frequent contacts with Rene Corvo and with one Frank Castro, a narcotics kingpin with alleged Sandinista connections."

In a February 10, 1987 cable to CIA regarding information about Carlos Lehder-Rivas, the FBI reported that Frank Castro was considered to be a narcotics trafficker, mercenary and a person who would do anything for money. The cable also noted that Castro was the subject of a Miami narcotics case and that Castro's break from the anti-Fidel Castro movement was consistent with the ideology of Lehder-Rivas who was pro-Fidel Castro.

A February 13, 1987 FBI cable to CIA Headquarters provided background information on Frank Castro, his father, brothers and other associates. With regard to Castro, the cable said that:

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

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

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

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

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

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

A November 25, 1987 cable noted:

. . . that DEA/Miami requested a meeting . . . . to discuss the development of case involving Frank Castro and [a specifically named] Cuban exile. . . . These individuals also figured in a narcotics case involving Cuba. Both men claimed to be working under the direction of [CIA]. Station assured DEA that we were not in any way involved with these persons.

Information Sharing with Other U.S. Government Entities. As explained above, CIA collected and shared information concerning Frank Castro with various U.S. law enforcement entities before, during and after the 1980s. No records have been found to indicate that CIA shared the information it collected concerning Castro with Congress.

Appendix C

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

No information has been found to indicate that either the Government of National Reconstruction (GRN) or the Government of Cuba (GOC) was involved in drug trafficking activities with individuals associated with the Contras. CIA reporting concerning drug trafficking by the GRN and the GOC during the 1980s concerned the use of Nicaragua and Cuba for the transshipment of drugs to the United States. None of the reporting linked any Contra organization or Contra member with such activities.

Allegations of Drug Trafficking. A September 23, 1982 cable reported that Interior Minister Tomas Borge Martinez was interested in making some sort of arrangement with a bank in Panama. Interior Ministry official Federico Vaughan took $350,000 with him to Panama for deposit in the Bank Continental. It was suspected the money and the arrangement with a bank in Panama were both related to drug trafficking.

An October 8, 1982 cable to Headquarters reported that U.S. fugitive Robert Vesco and Interior Ministry official Paul Atha had said in early October 1982 that the GRN was planning a drug smuggling operation to earn cash for the GRN Ministry of the Interior (MINT).

An October 9, 1982 cable to Headquarters reported information that the nine member GRN Junta had approved a plan for narcotics operations in July or August 1982. Reportedly Interior Minister Tomas Borge Martinez would organize and direct the operation with U. S. fugitive Robert Vesco acting as his advisor. According to this report, the GRN was laying the groundwork through trusted collaborators in Colombia, Panama and Costa Rica.

A December 4, 1982 cable to Headquarters reported that the GOC was involved in planning possible narcotics shipments from Colombia to Corn Island in the Caribbean. This report identified Interior Ministry officials Paul Atha and Federico Vaughan as involved in the drug smuggling scheme. A December 9, 1982 cable to Headquarters indicated that Atha had said that Corn Island airstrip and El Bluff, Nicaragua would be used for drug air shipments. Managua airfields, would be used for emergencies and "decoy flights."

A February 1, 1983 cable to Headquarters reported that Atha and Vaughan went to Panama with $380,000 to deposit in a specifically identified bank. The deposit was reportedly the product of drug operations by Borge, Atha and Vaughan. The cable said that it was surmised that "higher GRN officials know about Borge's drug activities."

A May 26, 1983 cable to Headquarters reported rumors concerning cultivation of marijuana on the Nicaraguan Atlantic Coast and shipment to the United States. The cable stated the idea was credible and consistent with the GRN's desire to damage the United States in any way possible through drug trafficking.

A June 30, 1983 cable to Headquarters reported that GRN Vice Minister of Aviation Marco Salinas Pasos, FSLN Party official Jose Talavera, Cuban Ambassador Carlos Diaz, and a Cuban Intelligence Officer were involved in a drug trafficking conspiracy with Colombian drug trafficker Jorge Morales and a Haitian exile. It was reported that Salinas had agreed to arrange the purchase of a DC-6 in Managua for use in transporting a drug shipment from Colombia to the United States.

A December 30, 1983 cable to Headquarters reported that Federico Vaughan and Paul Atha intended to come to San Jose to introduce a person to cocaine dealers so that person could be the go-between for buyers and sellers. Reportedly Vaughan said "The idea is to flood the U.S. with cocaine to the detriment of the imperialist youth while proceeds will help the Nicaraguan revolution." Vaughan also reportedly indicated that the GRN wanted to buy a ranch in Costa Rica with a landing strip to receive shipments of cocaine. Vaughan, Borge, Atha, and the Cubans reportedly used a codebook to encode messages regarding cocaine trafficking.

An April 3, 1984 cable to Headquarters reported information that Paul Atha and Tomas Borge were still involved in delivering drugs to Corn Island as of April 1984.

Cables dated April 28 and May 3, 1984 to Headquarters reported that the drug operation described in June 1983 involving Salinas and the purchase of a DC-6 apparently never occurred. The cable further indicated that there had been reporting beginning in April 1984 that a Salvadoran Farabundo Marti National Liberation representative in Managua, Jacinto Bustillos, and GOC Ambassador Diaz were involved in a drug trafficking conspiracy with Jorge Morales and the GRN leadership.

On December 11, 1984, a cable to Headquarters reported that a Nicaraguan defector who had worked for the GRN Front company H&M believed that Atha and Vaughan were involved in drug trafficking because of the large amounts of dollars they handled without any apparent source. Atha was the Managing Director of H&M and Vaughan worked directly for him.

A July 19, 1985 cable to Headquarters identified a Cuban-American as the General Counsel for COPA airline in Managua and a long-time friend and attorney for Atha. According to the cable, the Cuban-American had commented that Atha "has gone very far into highly dangerous activities that include the smuggling of drugs."

A September 27, 1985 CIA "Narcotics Report" stated that there was confirmation that Minister of Interior Tomas Borge was involved in smuggling cocaine from Colombia to the United States via Nicaragua. Reportedly this was a secret known only to Borge, his assistant Franco Montealegre, the Chiefs of Police and State Security, and members of the National Directorate. Reportedly the Ministry of the Interior (MINT) became involved in drug trafficking in order to obtain money for clandestine operations by Intelligence and State Security Departments outside Nicaragua.

A typewritten Note for File, dated November 4, 1985, indicated that a former MINT officer had stated that H&M officials were former State Security officials or Sandinista policemen whose loyalty was unquestionable and that both Borge and Atha were extremely corrupt individuals.

In a February 27, 1986 cable to a number of Latin America Stations, Headquarters reported the former MINT officer's statement that Tomas Borge was directly involved with Colombian narcotics traffickers who used Nicaragua as a transit point for distributing drugs throughout the world. The Headquarters cable indicated that the officer claimed that Borge made arrangements with GRN Customs officials to ensure that selected aircraft coming from Colombia were not subjected to searches. The officer believed the income from narcotics operations was used to finance espionage operations. He testified to Congress in 1986 that Sandinista officials supported drug trafficking to earn foreign currency for espionage operations.

An August 8, 1986 cable to Headquarters reported that, in a 1982 meeting of MINT personnel, Borge commented that drugs seized in Nicaragua would be used as a "strategic arm" against the United States. According to Borge, this use of cocaine seized in Nicaragua would bring foreign currency to the Government and it would cause chaos within the United States. Further, Borge reportedly stated that the United States would be too occupied attempting to stop the drug traffic to be able to meddle in Nicaragua's affairs.

A November 8, 1988 cable to Headquarters forwarded a FBI Miami Field Office request for comment concerning information provided by the FBI relating to a 1984 agreement between Colombian Medelin Cartel drug traffickers Carlos Lehder Rivas, Pablo Escobar Gaviria, Jose Gonzalo Rodriguez Gacha, and the GRN by which they would be allowed to stay in Managua, establish a base of operations, and be secure from Colombian and U.S. authorities. According to the cable, the FBI information indicated that $3 million had been turned over to Tomas Borge by the cartel leaders as consideration for the agreement. The cable also reported that a number of drug smuggling operations took place at Los Brasiles airport.

The November 8, 1988 cable further reported to Headquarters that the cartel used the services of Robert Vesco in October or November 1984 to gain GOC approval to overfly Cuba with drug shipments. Raul Castro reportedly was involved in the agreement. The cartel established a scheme to transship drugs through Corn Island and Cuba to San Andros Island, Bahamas with all communications concerning impending drug shipments made by secure means between the GRN and the GOC to prevent any disclosure of their association with the Colombian traffickers. The operation came to a halt sometime in early 1985.

An April 20, 1989 cable to Headquarters reported statements attributed to a former assistant to Paul Atha in H&M. The former assistant reportedly stated that the MINT was involved in early 1989 in supporting Borge's front company in transshipping drugs from Colombia through Corn Island, Nicaragua to the Bahamas.

A July 7, 1989 cable to Headquarters reported information provided by a GRN defector. According to him, a GRN officer stated in mid-1984 that the MINT had accommodated international drug traffickers from the Medelin cartel in a MINT safehouse in Managua. He also reportedly had stated that the GRN contact point for the drug traffickers was Paul Atha and that the GRN was involved in international drug trafficking targeted at the United States. The report also indicated that "drug trafficking would support revolutionary goals and was a means to an end," i.e., to improve the dire economic situation in Nicaragua and weaken the United States.

CIA Response to Allegations of Drug Trafficking. Information received by CIA throughout the 1980s alleging that individuals associated with the Cuban and Nicaraguan Governments were involved in drug trafficking appears to have been broadly shared with other U.S. Government entities. This was accomplished through intelligence reports that were disseminated by CIA to Intelligence Community agencies and in finished intelligence publications that were disseminated more broadly. For example:

On April 15, 1983, LA Division disseminated an Intelligence Report to all Intelligence Community agencies reporting that the GRN, as of late September 1982, planned to purchase drugs in Colombia for eventual resale in the United States. The report stated that Tomas Borge, Nicaraguan Interior Minister, would organize and direct the drug smuggling operation and American fugitive Robert Vesco would act as his advisor. The report was disseminated to the FBI, DEA, Treasury, Customs, DIA, DoS, and NSA.

On March 8, 1984, a DI analysis reported that drugs were to be shipped from Cuba to Nicaragua for onward transport in a Nicaraguan ship and delivery to the United States. The article conjectured that the GOC and GRN might be motivated to facilitate drug trafficking in order to obtain hard currency.

An October 9, 1984 CIA DI analysis, titled "Nicaragua: Involvement in Drug Trafficking," reported that:

There is a growing body of evidence that high-level officials of the Sandinista government have been conspiring with Colombian drug traffickers to smuggle cocaine from Nicaragua into the US. . . . Despite recent publicity on Nicaragua's role in the drug trade and indictments issued in the US against [Federico] Vaughan and some of the other key participants, the prospect of hard currency earnings probably will keep the Sandinistas involved. This could result in a serious setback for US law enforcement and drug interdiction efforts.

An October 1984 DI Intelligence Assessment summarized CIA and DEA reporting that supported a conclusion that high level Nicaraguan Government officials had conspired with Colombian drug traffickers to smuggle cocaine from Nicaragua into the United States. The Assessment specifically cited Tomas Borge as probably directing the operation, with at least the tacit approval of the Sandinista National Directorate and the Junta. The report was disseminated to the DoJ, DEA, Treasury, Customs, DoS, and NSA.

A December 1984 National Intelligence Council Interagency Intelligence Memorandum titled, "Cuban Government Involvement in Drug Trafficking," stated that the GRN and GOC were working together in facilitating the shipment of drugs from Colombia to the United States.

Information Sharing with Other U.S. Government Entities. As explained above, much of the intelligence regarding alleged drug trafficking by the Sandinista Government was shared with other U.S. Government intelligence and law enforcement agencies. This was accomplished by dissemination of intelligence reports and finished intelligence products.

On April 6, 1984, CIA provided a response to questions posed by the SSCI concerning Nicaraguan involvement in drug trafficking. The response indicated that, although uncorroborated reports indicating Nicaraguan involvement in shipping cocaine to the United States had been received, CIA was unable to confirm reports implicating high-level Sandinista leaders in drug trafficking at that time.

On August 9, 1984, the National Intelligence Officer for Narcotics provided the DCI with summaries used to brief Congress concerning narcotics activity in Cuba and Nicaragua. The summaries described field reporting that indicated Nicaragua had been used as a transit point for the shipment of drugs into the United States, possibly for the purpose of obtaining hard currency for the GRN. The summaries also provided information regarding cooperation between Cuba and Nicaragua in plans for the processing and shipment of narcotics purchased from Colombian drug dealers.

On March 16, 1988, CIA Deputy Director for Intelligence Richard J. Kerr testified before the House Select Committee on Narcotics Abuse and Control that the Nicaraguan Government may have been involved in narcotics activity to obtain hard currency. He cited the 1984 DEA sting operation that resulted in the indictment of Federico Vaughan, an aide to Interior Minister Tomas Borge, as a co-conspirator in a scheme to smuggle drugs into the United States.

According to a May 3, 1988 Memorandum for the Record prepared by OCA, Dewey Clarridge--who served as Chief of DO/Latin America Division from 1981 to 1984--was interviewed by two Staff members of the House Judiciary Committee's Subcommittee on Crime regarding his knowledge of drug trafficking by the Nicaraguan Government or the Contras. Clarridge, the MFR reported, discussed CIA's assistance to the 1984 DEA sting operation.

Appendix D

Potential Disinformation and CIA-Contra Drug Allegations

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

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

In 1985 Nicaraguan Foreign Minister D'Escoto had complained to the Costa Rican Foreign Minister that Eden Pastora was building airfields which were to be used for narcotics trafficking to support his group.

In October 29, 1985 discussing the First Ladies Drug Conference, the Nicaraguan newspaper El Nuevo Diario had said that "if Mrs. Reagan, in reality, with honesty, attempted to combat the distribution of drugs," she should prevent the CIA from providing drugs to the Contras, drugs that "unleash [the Contra's] bestial actions" against indefensible citizens and children.

On November 8, 1986, the Foreign Broadcast Information Service reported translated excerpts from a speech by Sandinista leader Daniel Ortega that included allegations of CIA involvement in drug-related airstrips at Ilopango, El Salvador; Aguacate, Honduras; and Nicoya, Costa Rica.

The Nicaraguan Ministry of the Interior (MINT) announced on November 23, 1986 that their investigations had uncovered a "vast net of drug traffickers' backed by the FDN, MISURA and 'the mafia'".

A December 3, 1986 review of Sandinista media stories stated that El Nuevo Diario on November 28 carried an article titled "Contras Drowning in Drug Trade." The article reported that La Nacion of San Jose had "revealed" that the Secretary of the Conservative Party of Nicaragua, currently residing in Costa Rica, was connected with the shipment of "100 million dollars worth of cocaine" to the United States.

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

In a February 4, 1986 cable titled "Possible Disinformation re Contras," a cable informed Headquarters of an article in the January 9, 1986 issue of the West German illustrated magazine Der Stern asserting that the Contras, while being supported by the U.S. Government, were also financing their efforts through drug trafficking. The article reportedly commented on the apparent irony of President Reagan accusing the Nicaraguans of drug trafficking in 1985 if it were true that the United States was supporting drug-financed Contra activities in 1986.

A February 5, 1987 cable describing a pro-Soviet political action campaign by the French General Confederation of Labor (CGT) notified Headquarters that the French Communist Party had instructed the CGT to begin a pro-Soviet political action campaign that included among its themes U.S. support for drug trafficking by the Contras.

A story in the February 15, 1987 issue of a Tanzanian newspaper that was attributed to the Cuban newspaper agency, Granma, reportedly alleged that U.S. Government officials and CIA had diverted funds from the sale of narcotics to help fund the Nicaraguan Contra forces.

In a May 4, 1987 program summary of Radio Moscow Spanish language transmissions to Chile, the Foreign Broadcast Information Service Station included an item that cited the U.S. Congress as reporting that the "war against the Sandinist[a] regime is . . . paid with drugs."

An August 6, 1987 cable notified Headquarters of an "anti-[U.S. Government]" article in the Athens-based PASOK Party weekly Exormisi on August 2, 1987 titled "Drug Smuggling as a Method for Exercising Foreign Policy," and including quotations from an Italian publication L'Unita that alleged drug smuggling to be the source of funds for the Contras. In response, Headquarters noted that "L'Unita is a mouthpiece of the Italian Communist Party."

A October 31, 1987, Headquarters cable noted a report on Soviet trade union activities in the international labor movement that noted that the Soviets were making a major effort to influence and control labor organizations worldwide "in order to use them to support Soviet foreign policy objectives and to further the aims of World Communism." Headquarters also stated that the French CGT had rejoined the World Federation of Trade Unions and had begun its new propaganda campaign including Contra-drug trafficking, at Soviet and French Communist Party direction.

A September 15, 1988, cable mentioned articles in Bolivian newspapers were alleging that drug traffickers in Huanchaca, Bolivia were receiving protection from the U.S. Government and that the drug profits were being used to finance the Contras. Another cable on September 17, 1988 stated that a press service that was distributing the same articles in Rome was thought to have "long-standing Cuban links." In a September 29, 1988 telegram, the U.S. Embassy in La Paz reported to the Department of State (DoS) that the son of Bolivian drug trafficker Roberto Suarez was also spreading the Huanchaca allegations. An October 7 cable mentioned "[the] likely Cuban-sourced disinformation that [the U.S. Government] is narco-trafficking in Bolivia to fund the Contras."

Appendix E

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

Allegations of Drug Trafficking by CIA and the Contras. Anthony Avirgan and Martha Honey were husband and wife journalists and U.S. citizens. Avirgan was present at the press conference of Eden Pastora at La Penca, Nicaragua on May 30, 1984 where a bomb exploded. Avirgan and Honey asserted in the media that the perpetrator of the La Penca bombing was a right-wing, Libyan-origin terrorist who they said was named Amac Galil or Ahmed Khalil, and who used the identify of the Danish journalist, Per Anker Hansen. According to Avirgan and Honey, the terrorist was tied to the drug-financed "Secret Team" of FDN Contras and CIA agents. A June 5, 1984 cable to Headquarters reported that Martha Honey had "verified" that an individual at La Penca named Per Anker Hansen was there using false identification papers.

An August 27, 1985 cable notified Headquarters that Hansen, a Danish citizen whose passport had been used as identification by the attempted assassin, had been affiliated with organizations sympathetic to "South America" for several years.

According to media articles, between August 1985 and April 1987, Avirgan and Honey publicized their version of the La Penca incident and of a drug-financed CIA-Contra "Secret Team" in press articles and appearances in Norway, Denmark, The Netherlands, Spain, the United Kingdom, India, Uruguay, Nicaragua, and the United States, as well as in Costa Rica. In an article entitled "The Carlos File," published in the October 5, 1985 edition of The Nation, Avirgan and Honey cited a specific individual--Carlos Rojas Chinchilla--as the source of allegations linking the CIA-Contra "Secret Team" with drug trafficking. The article stated that Rojas said he was in contact with an individual named "David," who allegedly was a driver who had been killed by John Hull and buried on Hull's ranch. Rojas was later arrested by Costa Rican authorities in August 1987 and at that time made a statement that "he made-up the 'David' story. . . . in return for a payment of $10,000." Avirgan and Honey also published their allegations in 1985 as a book titled La Penca: Report of Investigation.

Legal Actions Resulting From Drug Trafficking Allegations. Between 1985 and 1994, Avirgan and Honey were involved in several U.S. and Costa Rican legal actions as a result of their allegations of a CIA-Contra team of drug-financed secret operators with John Hull as their common focal point. The earliest was a libel suit that John Hull filed against the couple in Costa Rica in response to their 1985-86 press allegations. On April 11, 1986, Headquarters was informed of the Christic Institute's interest in this case. The suit was scheduled for final arguments on May 23, 1986.(1)

In May 1986, Daniel Sheehan filed a civil action, Tony Avirgan and Martha Honey, Plaintiffs vs. John Hull, et al., Defendants, in the U.S. District Court for Southern Florida, under the sponsorship of the Christic Institute. The May 29, 1986 complaint in what became known as the "La Penca Case" charged 30 individuals--including John Hull, Rene Corbo, Felipe Vidal, Moises Nunez, and Adolfo Calero--with conspiracy, injuries, battery, assault, intentional infliction of mental distress, and intentional interference with the business of the plaintiffs. The suit charged the defendants used six criminal means to "effectuate the unlawful objective of this Federal Neutrality Act Conspiracy."

Included among these alleged "criminal means" was a violation of Title 18, United States Code, Sections 1401, et seq., and 1952 [sic], to fund the equipping, arming, training, and supplying of members of a "foreign military expeditionary force" by smuggling cocaine from the Republic of Colombia through Costa Rica into the United States. The suit also alleged "one-dozen criminal overt acts committed by the Defendants. . . ." Three of these alleged "criminal overt acts" involved drug trafficking or dealing with drug traffickers:

. . . .

4. The transportation and sale of thousands of kilograms of cocaine from the Republic of Colombia, through Costa Rica on the land owned or managed by Defendant John Hull in Northern Costa Rica into the United States, where it was sold and distributed inside and beyond the State of Florida;

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

. . . .

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

. . . .

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

On 29 May 1986 Daniel Sheehan filed a lawsuit captioned Tony Avirgan and Martha Honey v. John Hull et al in the United States District Court of Southern Florida in which they asked for $24 Million in damages. This suit tracks the allegations contained in [an earlier cable] and was not unexpected. The complaint is essentially a artfully [sic] woven story about alleged excesses of the Nicaraguan resistance and its supporters in Central America with the La Penca bombing at its center.

The May 29, 1986 complaint was amended twice. On December 12, 1986, Sheehan filed an affidavit that represented his recounting of the "Secret Team theory" as a supplemental filing to the amended complaint.

On June 23, 1988, the presiding judge in the civil action signed an order granting summary judgments to the defendants. On February 2, 1989, the Judge signed an order that granted the defendant's motions for costs and attorney's fees for the defendants and stated:

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

The Judge awarded the defendants a total of $1,034,381.36.
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Re: OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT

Postby admin » Sun Jun 14, 2015 8:51 pm

Exhibit 1

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Re: OFFICE OF INSPECTOR GENERAL INVESTIGATIONS STAFF REPORT

Postby admin » Sun Jun 14, 2015 8:55 pm

Errata

This report was originally posted on the Central Intelligence Agency's Internet Web site at approximately 5 p.m. Thursday, October 8, 1998--the day that it was delivered to Congress. It contained one paragraph with editorial errors, lacked all but the first footnote, and contained some formatting problems. The on-line version has been corrected as detailed below.

1. Paragraph 35 of the report contained editorial errors. The paragraph as it appears in the printed Report has been added to the on-line Report. This is the text of paragraph 35 as originally posted on the Internet:

CIA Policies and Practices. CIA acted inconsistently in handling allegations or information indicating that Contra-related organizations and individuals were involved in drug trafficking. In some five cases, CIA pursued confirmation of allegations or information of drug allegations. In other acted to end a relationship after receiving drug trafficking allegations or information. In another six cases, CIA knowledge of allegations or information indicating that organizations or individuals had been involved in drug trafficking did not deter their useemployment by CIA. In other at least two of those cases, CIA did not act to verify drug trafficking allegations or information even when it had the opportunity to do so. In still other cases, CIA deemed the allegation or information to be unsubstantiated or not credible.

2. In the main report, footnotes 2-40 were inadvertently left out as were the two footnotes in Appendix A and the single footnote in Appendix E. All missing footnotes have been added. The footnotes themselves are contained in a separate HTML file and their associated numbers have been added to the Report's text as links to the corresponding footnote.

3. Underlining contained in the originals of quoted material were inadvertently left out; the correct underlining has been added. (Underlining contained in original quotes is indicated by the phrase ''(Underlining in original.)'' following each affected quote.) The affected paragraphs are 573, 712, and 1126.

4. In the printed version of the Report, the authors added emphasis to selected words within quotations by printing them in bold. (Added emphasis is indicated by the phrase "(Emphasis added.)" following each affected quote.) In converting the Report's text from its original format to HTML, block quotations were converted to a bold font. The words to which the authors had added emphasis then appeared in a normal font. To restore the emphasis the authors intended, the block quotations--as in the printed version--have been indented from the left and right margins and the quotation appears in a normal font except the words to which the authors added emphasis which appear in bold. The affected paragraphs are: 45, 47, 54, 56, 59, 65, 67, 936, and 1027.

5. In converting the original document to HTML, normal spacing between several paragraphs was lost. Blank lines have been inserted following paragraphs 5, 31, 197, 203, 410, 468, 534, 543, 606, 812, 987, and 1087; before the first and after the last bullets under paragraph 22 in Appendix C; and after the last bullet under paragraph 1 in Appendix D.

6. The heading after paragraph 903 has been centered.

7. In the Table of Contents, a duplicate link to "Pilots, Companies, and Other Individuals Working for Companies Used to Support the Contra Program" was removed.

8. In the Table of Contents, titles were added for Appendices C, D and E.

9. Blank space was removed between the title and text of paragraph 251 and from the middle of paragraphs 102, 622, and 981.

For viewers' convenience, Exhibit 1, which consists of 12 pages, has been modified so that viewers may move back and forward from page to page rather than having to return to the Report's index to select the previous or next page.
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