TRIO CREATED MASS MARKET IN U.S. FOR CRACK COCAINE
by Gary Webb
Aug 22, 1996
Trio created mass market in U.S. for crack cocaine
San Jose Mercury News
If they'd been in a more respectable line of work, Norwin Meneses, Oscar Danilo Blandon Reyes and "Freeway Rick" Ross would have been hailed as geniuses of marketing.
This odd trio - a smuggler, a bureaucrat and a ghetto teenager - made fortunes creating the first mass market in America for a product so hellishly desirable that consumers will literally kill to get it: "crack" cocaine.
Federal lawmen will tell you plenty about Rick Ross, mostly about the evils he visited upon black neighborhoods by spreading the crack plague in Los Angeles and cities as far east as Cincinnati. Tomorrow, they hope, Freeway Rick will be sentenced to life in prison without the possibility of parole.
But those same officials won't say a word about the two men who turned Rick Ross into L.A.'s first king of crack, the men who, for at least five years, supplied him with enough Colombian cocaine to help spawn crack markets in major cities nationwide. Their critical role in the country's crack explosion has been a strictly guarded secret.
To understand how crack came to curse black America, you have to go into the volcanic hills overlooking Managua, the capital of the Republic of Nicaragua.
Biggest military upset
During June 1979, those hills teemed with triumphant guerrillas called Sandinistas - Cuban-assisted revolutionaries who had just pulled off one of the biggest military upsets in Central American history. In a bloody civil war, they'd destroyed the U.S.-trained army of Nicaragua's dictator, Anastasio Somoza.
In the dictator's doomed capital, a minor member of Somoza's government decided to skip the war's obvious ending. On June 19, Oscar Danilo Blandon Reyes gathered his wife and young daughter and flew into exile in California.
Today, Blandon is a well-paid and highly trusted operative for the U.S. Drug Enforcement Administration. Federal officials say he is one of the DEA's top informants in Latin America, collecting intelligence on Colombian and Mexican drug lords and setting up stings.
In March, he was the DEA's star witness at a drug trial in San Diego, where, for the first time, he testified publicly about his strange interlude between government jobs: the years he sold cocaine to the street gangs of black Los Angeles.
Blandon swore that he didn't plan on becoming a dope dealer when he landed in the United States with $100 in his pocket, seeking political asylum. He did it, he insisted, out of patriotism.
When duty called in late 1981, he was working as a car salesman in East Los Angeles. In his spare time, he said, he and a few fellow exiles were working to rebuild Somoza's defeated army, the Nicaraguan national guard, in hopes of one day returning to Managua in triumph.
But the rallies and cocktail parties the exiles hosted raised little money. "At this point, he became committed to raising money for humanitarian and political reasons via illegal activity (cocaine trafficking for profit)," said a heavily censored parole report, which surfaced during the March trial.
That venture began, Blandon testified, with a phone call from a wealthy college friend in Miami.
Blandon said his college chum, who also was working in the resistance movement, dispatched him to Los Angeles International Airport to pick up another exile, Juan Norwin Meneses Cantarero. Though their families were related, Blandon said, he'd never met Meneses until that day.
"I picked him up, and he started telling me that we had to (raise) some money and to send to Honduras," Blandon testified. He said he flew with Meneses to a camp there and met one of his new companion's old friends, Col. Enrique Bermudez.
Bermudez - who'd been Somoza's Washington liaison to the American military - was hired by the Central Intelligence Agency in mid-1980 to pull together the remnants of Somoza's vanquished national guard, records show. In August 1981, Bermudez's efforts were unveiled at a news conference as the Fuerza Democratica Nicaraguense (FDN) - in English, the Nicaraguan Democratic Force. It was the largest and best-organized of the handful of guerrilla groups known as the contras.
Bermudez was the FDN's military chief and, according to congressional records and newspaper reports, received regular CIA paychecks for a decade, payments that stopped shortly before his still-unsolved slaying in Managua in 1991.
Reagan OKs covert operations
White House records show that shortly before Blandon's meeting with Bermudez, President Reagan had given the CIA the green light to begin covert paramilitary operations against the Sandinista government. But Reagan's secret Dec. 1, 1981, order permitted the spy agency to spend only $19.9 million on the project, an amount CIA officials acknowledged was not nearly enough to field a credible fighting force.
After meeting with Bermudez, Blandon testified, he and Meneses "started raising money for the contra revolution."
While Blandon says Bermudez didn't know cocaine would be the fund-raising device they used, the presence of the mysterious Mr. Meneses strongly suggests otherwise.
Norwin Meneses, known in Nicaraguan newspapers as "Rey de la Droga" (King of Drugs), was then under active investigation by the DEA and the FBI for smuggling cocaine into the United States, records show.
And Bermudez was very familiar with the influential Meneses family. He had served under two Meneses brothers, Fermin and Edmundo, who were generals in Somoza's army.
Despite a stack of law-enforcement reports describing him as a major drug trafficker, Norwin Meneses was welcomed into the United States in July 1979 as a political refugee and given a visa and a work permit. He settled in the San Francisco Bay Area, and for the next six years supervised the importation of thousands of kilos of cocaine into California.
At the meeting with Bermudez, Meneses said in a recent interview, the contra commander put him in charge of "intelligence and security" for the FDN in California.
Blandon, he said, was assigned to raise money in Los Angeles.
Blandon said Meneses gave him two kilograms of cocaine (roughly 4 1/2 pounds) and sent him to Los Angeles.
"Meneses was pushing me every week," he testified. "It took me about three months, four months to sell those two keys because I didn't know what to do. . . ."
To find customers, Blandon and several other Nicaraguan exiles working with him headed for the vast, untapped markets of L.A.'s black ghettos.
Blandon's marketing strategy, selling the world's most expensive street drug in some of California's poorest neighborhoods, might seem baffling, but in retrospect, his timing was uncanny. He and his compatriots arrived in South-Central L.A. right when street-level drug users were figuring out how to make cocaine affordable: by changing the pricey white powder into powerful little nuggets that could be smoked - crack.
Emergence of crack
Crack turned the cocaine world on its head. Cocaine smokers got an explosive high unmatched by 10 times as much snorted powder. And since only a tiny amount was needed for that rush, cocaine no longer had to be sold in large, expensive quantities. Anyone with $20 could get wasted.
It was a "substance that is tailor-made to addict people," Dr. Robert Byck, a Yale University cocaine expert, said during congressional testimony in 1986. "It is as though (McDonald's founder) Ray Kroc had invented the opium den."
Crack's Kroc was a disillusioned 19-year-old named Ricky Donnell Ross, who, at the dawn of the 1980s, found himself adrift on the streets of South-Central Los Angeles.
A talented tennis player for Dorsey High School, Ross had recently seen his dream of a college scholarship evaporate when his coach discovered he could neither read nor write.
A friend of Ross' - a college football player home at Christmas from San Jose State University - told him "cocaine was going to be the new thing, that everybody was doing it." Intrigued, Ross set off to find out more.
Through a cocaine-using auto-upholstery teacher Ross knew, he met a Nicaraguan named Henry Corrales, who began selling Ross and a friend , Ollie "Big Loc" Newell, small amounts of remarkably inexpensive cocaine.
Thanks to a network of friends in South-Central L.A. and Compton, including many members of various Crips gangs, the pair steadily built up clientele. With each sale, Ross reinvested his hefty profits in more cocaine.
Eventually, Corrales introduced Ross and Newell to his supplier, Blandon. And then business really picked up.
"At first, we was just going to do it until we made $5,000," Ross said. "We made that so fast we said, no, we'll quit when we make $20,000. Then we was going to quit when we saved enough to buy a house . . ."
Ross would eventually own millions of dollars' worth of real estate across Southern California, including houses, motels, a theater and several other businesses. (His nickname, "Freeway Rick," came from the fact that he owned properties near the Harbor Freeway in Los Angeles.)
Within a year, Ross' drug operation grew to dominate inner-city Los Angeles, and many of the biggest dealers in town were his customers. When crack hit L.A.'s streets hard in late 1983, Ross already had the infrastructure in place to corner a huge chunk of the burgeoning market.
It was not uncommon, he said, to move $2 million or $3 million worth of crack in one day.
"Our biggest problem had got to be counting the money," Ross said. "We got to the point where it was like, man, we don't want to count no more money."
Nicaraguan cocaine dealer Jacinto Torres, another former supplier of Ross and a sometime-partner of Blandon, told drug agents in a 1992 interview that after a slow start, "Blandon's cocaine business dramatically increased. . . . Norwin Meneses, Blandon's supplier as of 1983 and 1984, routinely flew quantities of 200 to 400 kilograms from Miami to the West Coast."
Blandon told the DEA last year that he was selling Ross up to 100 kilos of cocaine a week, which was then "rocked up" and distributed "to the major gangs in the area, specifically the Crips and the Bloods," the DEA report said.
At wholesale prices, that's roughly $65 million to $130 million worth of cocaine every year, depending on the going price of a kilo.
"He was one of the main distributors down here," said former Los Angeles Police Department narcotics detective Steve Polak, who was part of the Freeway Rick Task Force, which was set up in 1987 to put Ross out of business. "And his poison, there's no telling how many tens of thousands of people he touched. He's responsible for a major cancer that still hasn't stopped spreading."
But Ross is the first to admit that being in the right place at the right time had almost nothing to do with his amazing success. Other L.A. dealers, he noted, were selling crack long before he started.
What he had, and they didn't, was Blandon, a friend with a seemingly inexhaustible supply of high-grade cocaine and an expert's knowledge of how to market it.
"I'm not saying I wouldn't have been a dope dealer without Danilo," Ross stressed. "But I wouldn't have been Freeway Rick."
The secret to his success, Ross said, was Blandon's cocaine prices. "It was unreal. We were just wiping out everybody."
"It didn't make no difference to Rick what anyone else was selling it for. Rick would just go in and undercut him $10,000 a key," Chico Brown said. "Say some dude was selling for 30. Boom - Rick would go in and sell it for 20. If he was selling for 20, Rick would sell for 10. Sometimes, he be giving (it) away."
Ross said he never discovered how Blandon was able to get cocaine so cheaply. "I just figured he knew the people, you know what I'm saying? He was plugged."
But Freeway Rick had no idea just how "plugged" his erudite cocaine broker was. He didn't know about Meneses, or the CIA, or the Salvadoran air-force planes that allegedly were flying the cocaine into an air base in Texas.
And he wouldn't find out about it for another 10 years.