Part 2 of 2
Then something inexplicable happened.
Pereira, whom the FBI knew to be a major international cocaine trafficker, was turned loose after paying a small fine for not declaring the $70,000. He returned to Costa Rica and immediately resumed drug trafficking, which the FBI learned while monitoring a phone call from Pereira to Cabezas on January 21, 1983. "Fine was completed. No probation, no prison," Pereira was recorded as telling Cabezas. "Horacio wants to get ready to send Carlos some material."
By then the feds were crawling all over the drug ring. All of the traffickers' phone calls were being taped and transcribed; eventually the FBI would monitor more than 13,000 conversations. Cabezas and Zavala were being shadowed everywhere. Their dealers and their dealers' customers had their phones tapped as well.
The wiretaps revealed that the Colombian side of Zavala's drug operation was using freighters registered to the Gran Colombiana shipping line to bring cocaine into the United States. Agents began following the Gran Colombiana ships as they plied the waters off the West Coast and watched as kilos of cocaine were unloaded by Cabezas's associates in San Francisco and Seattle. Right before Christmas, the FBI started taking the operation apart.
On December 22, 1982, they intercepted two men coming off the freighter Ciudad de Nieva in Los Angeles, carrying thirty-nine pounds of cocaine. Another Gran Colombiana ship, the Ciudad de Cucuta, pulled into Pier 96 in San Francisco shortly after the first of the year, and the FBI set up a stakeout. It was a vessel that, according to one report, "had been raided in previous drug seizures."
Nearly two weeks went by without anything happening. Then, just before 2 a.m. on January 17, 1983, during the heaviest fog of the winter, a silver-and- orange Chevy van and a Toyota Celica pulled up to a hole in a fence near a swampy marsh leading to Pier 96. Seven men got out and began wading through the swamp toward the docked freighter, disappearing into the darkness. Two hours later the Celica and the van returned, and the seven men materialized out of the gloom, carrying heavy duffel bags. Two of them wore divers' wet suits.
The stakeout agents moved in, and one of the suspects unleashed a short burst from an Uzi submachine gun, but no one was injured, and they quickly surrendered. The agents found that all the men were heavily armed—a wise precaution, considering the value of what they were carrying: an astonishing 430 pounds of cocaine. Five other men were also rounded up that night, most of them Colombians who had been seen in Los Angeles and Seattle during earlier freighter stakeouts.
It was the biggest cocaine bust in the history of the West Coast.
The next day the San Francisco Chronicle blasted the news of the drug raid across its front page. Headlined "Cocaine Seized from Frogmen at S.F. Pier," the story told of "a fog-shrouded scene right out of a B-movie" and featured a large front-page picture of a Customs agent in a windbreaker piling football-sized bricks of cocaine on a table.
It was the first case made by President Ronald Reagan's new federal Drug Task Force in San Francisco, and U.S. Attorney Joseph Russoniello, a right-wing Republican close to the Reagan administration, made sure the media understood what a momentous seizure the president's new drug warriors had made. Russoniello told reporters that the street value of the cocaine the frogmen were carrying was, after "routine dilution," a whopping $750 million—three quarters of a billion dollars. Even the agents working the case couldn't swallow that one. Russoniello's quote in the Chronicle was followed by one from the DEA saying the load was worth no more than $100 million on the street, and between $11 million and $12 million wholesale.
Two weeks later agents in Los Angeles raided the Gran Colombiana freighter Ciudad de Santa Maria and arrested fifteen people, again mostly Colombians, in the act of unloading 150 pounds of cocaine. A UPI story noted that "the arrests were made as the suspects tried to transfer the drug ashore by way of couriers and a scuba diver." That story said the cocaine was worth $22.8 million.
(Amazingly, cocaine continued arriving in the United States aboard Gran Colombiana freighters all the way through 1986. The very same ship docked at Pier 96 that night in January 1983—the Ciudad de Cucuta —was found in Houston the following year with $18 million worth of cocaine secreted behind a steel wall. The shipping line was partly owned by the Colombian and Ecuadoran governments.)
The hammer fell next on Carlos Cabezas and Julio Zavala.
At 7 a.m. on February 15, federal agents and local police simultaneously raided fourteen locations in the San Francisco area, including Cabezas's house and Zavala's apartment, scooping up everyone and everything they could find. The haul included the Colombian supplier Alvaro Carvajal Minota; Cabezas; his mother, Gladys; Zavala; the low-level dealers they had been selling to; and some of their customers. In a bookcase in a San Francisco apartment, records show, police found "five flyers for Nicaraguan Benefit."
Once again U.S. Attorney Russoniello hosted a media event, telling reporters: "Before, we got the mules. These are the higher-ups in the operation." But the real higher-ups eluded capture, as neither Norwin Meneses nor any of his family was charged. Former Meneses aide Renato Pena told the Justice Department in 1997 that Norwin had a DEA agent on his payroll at the time and the agent "called Norwin a few weeks before Julio Zavala and Carlos Cabezas were arrested and warned Meneses of their impending arrests." The DEA agent, who admitted knowing Meneses, disputed those allegations during a Justice Department interview. (Curiously, the agent recalled having the impression that Meneses was working with the CIA at the time "moving guns for the Contras.")
While Russoniello and the federal agents who accompanied him were more than happy to give out detailed tidbits concerning the Colombians—such as the fact that Carvajal Minota sent boxloads of cash and jewelry each month to his mother in Cali—they had nothing at all to say about the cocaine and the cash the Nicaraguans were hauling to and from Costa Rica.
The involvement of Pereira and the Sanchez brothers was never disclosed, nor were they ever charged with anything. For some reason, the fact that the former Nicaraguan ambassador to Guatemala was bringing cocaine into the United States wasn't deemed newsworthy—or indictable.
The Meneses family's involvement with the drug ring was also suppressed. Defense lawyers had to get a court order to force the Justice Department to reveal that the 1981 searches targeting Jairo Meneses and Julio Bermudez, had even occurred. After the lawyers got those files, they accused the FBI of "serious misrepresentation" for concealing the identities of individuals "who are, clearly from the government's point of view, either distributing cocaine obtained from some of the principals in this case, or supplying it to them." The records, they argued, revealed that there was "a direct and ongoing connection between the Meneses organization and Carlos Cabezas."
The government replied that the searches had been of little importance.
When news of the arrests reached Central America, reporters there saw an angle that their American counterparts missed. "Somocistas traffic in drugs," is how the pro-Sandinista daily, Barricada, headlined the story that appeared on February 20, 1983. "Narcotics police of San Francisco, California, carried out a haul last Wednesday of 20 cocaine traffickers, among whom are several Nicaraguans who supported through this criminal activity the economic needs of Contra groups."
The paper quoted unnamed Nicaraguan diplomatic sources, asserting that "one could not establish how many of those captured are of Nicaraguan origin, but there were several, and they were tied to groups of former Somocista Guards in San Francisco, and that through the crime of trafficking in cocaine they are contributing economically to the Contras." It would take another three years before an American journalist would make the same connection.
Julio Zavala complained to the court that similar stories had appeared in the Spanish-language press in Costa Rica, making it impossible for him to return to Central America. Both Zavala and Cabezas were held in prison on $1,000,000 bail, which Cabezas was unable to raise. After getting a look at the evidence the FBI had compiled against him, Cabezas's attorney advised him to cut a deal with the government and testify against Zavala, which Cabezas did.
About a year later, shortly before his trial was to begin, Zavala's attorney, Judd Iverson, walked into U.S. District Court judge Robert Peckham's office and dropped a bombshell on his desk. Iverson handed Peckham two letters addressed to the court, written by Nicaraguan exiles in Costa Rica, regarding Julio Zavala's activities on behalf of the Contras. One was written by Horacio Pereira's brother- in-law, the exiled attorney Francisco Aviles Saenz, who identified himself as the international relations secretary for UDN-FARN. A published account said Aviles had also helped set up the Committee in Defense of Democracy in Nicaragua, a CIA front in San Jose, Costa Rica, with money from Venezuelan sources. The other letter was also written by Aviles, together with businessman Vicente Rappaccioli Marquis, on behalf of a group called the Conservative Party of Nicaraguans in Exile (PCNE). In the early 1980s he was part of UDN-FARN, according to a former UDN-FARN commander who'd been recruited by Rappaccioli.
The Contras' letters said Julio Zavala, who stood accused by the Justice Department of being a cocaine kingpin, was actually a Contra official who had been working for the resistance forces at the time of his arrest; Zavala was the assistant treasurer of the PCNE and a longtime member of UDN-FARN, which "fights for the restoration of the democratic system in the Republic of Nicaragua... under the slogan 'God, Fatherland and Freedom.'" The reason they were writing Peckham, the Contra leaders stated, was because the FBI had something that belonged to them, and they wanted it back.
When Zavala's apartment was searched the morning of his arrest, the police —in addition to finding an M-l carbine, a practice grenade, a variety of passports, and a catalog of machine guns and silencers—found slightly more than $36,000 in Zavala's nightstand, which was confiscated as illegal drug proceeds. That was not an unreasonable assumption, given all the cocaine and dmg paraphernalia the police found scattered about the place. But the Contras insisted that the money in the dealer's nightstand was theirs, and they had given it to Zavala so he could make some "purchases characteristic of this organization" while in San Francisco. "The retention of this money is prejudicing the progress of liberation, with natural consequences," Aviles warned Peckham.
According to the letter, Zavala had made several trips between California and Costa Rica on UDN-FARN's behalf, and during his last visit in January 1983 he was given $45,000 that UDN-FARN had "collected amongst our collaborators here in Costa Rica." To prove it, the Contra leaders provided copies of a letter appointing Zavala as the assistant treasurer of PCNE, and authorizing him "to collect within the United States money for the liberalization of Nicaragua from international communism"; a receipt showing the group had given him $45,000; his UDN-FARN credentials; and Aviles's sworn statement that he was willing to testify to Zavala's position if necessary.
Defense attorney Iverson told Judge Peckham that he wanted to go down to Costa Rica and take the Contras' depositions. If what they were saying was true, he argued, Zavala was going to defend himself on the grounds that "agents of the U.S. government were intricately involved in the alleged conspiracy and either sanctioned the use of cocaine trafficking to raise funds for Contra revolutionary activity and/or entrapped the Defendant into participating under the belief that such activity was sanctioned."
Peckham quickly scrawled his signature on an order sealing the Contras' letters and the other papers Iverson had submitted. Iverson had requested the secrecy order to keep the U.S. government from discovering the documents, which he felt might expose Aviles and Rappaccioli "and/or their families to harm or political pressure." In court a few weeks later, Iverson again raised the issue of the depositions, a request Peckham was still considering. Assistant U.S. Attorney Mark Zanides scoffed at the notion, saying that Iverson hadn't come close to showing a need to go "trudging off in the middle of the trial to Costa Rica without a firm basis for it."
Judge Peckham disagreed.
"It would be very important testimony to corroborate what they apparently claim is his defense. It has to do with the source of the money. My understanding is the Government will assert the money came from narcotics transactions?"
"It is very likely," Zanides answered.
"Well, he claims another source for another purpose," Peckham said. "And this evidence would corroborate that. It is very important evidence."
"I don't know, I have not seen any reason why the government isn't entitled to know the identity of the witnesses," Zanides complained. "I don't know what the source of this information is, or alleged information. I'm flying blind."
"There were letters from the people involved that were filed under seal with the court," Iverson reminded the prosecutor.
"I don't know who they are," Zanides protested. "These letters could come from anybody. I don't know if Mr. Iverson has ever spoken with them personally. I don't know how he can vouch... it is just a letter."
The prosecutor told Peckham that it wasn't "a situation where we are talking about a threat to the lives of the witnesses."
"They think so," Peckham replied.
"I think it is," Iverson said.
After holding two hearings in the secrecy of his chambers, Peckham had the lawyers come to his courtroom on July 16, 1984, to hear his decision. Prosecutor Zanides again complained that he was being kept in the dark about the identity of the Contra officials. "You are talking about some unknown people in a foreign country with allegedly revolutionary affiliation," he argued.
"The concern, I suppose, is that these people will be intimidated," the judge said, "not necessarily expressly. They are revolutionaries in Nicaragua. They want to overturn the Nicaraguan government, as I understand it. The Contras. They are based in Costa Rica and they have monies. Where those monies came from, nobody knows. There is speculation about that, but there is no evidence. They want to show that this money that was found in his possession came from the Contras."
"I appreciate all that. That's been apparent," Zanides said. "Let's assume for a moment that I don't believe these people, that I think they're lying. I mean, I have to be able to make inquiry of those persons or agencies whom I believe possess that information."
"Judge, these people probably have very close contacts with the CIA," Zavala's cocounsel, Marvin Cahn, argued. "We don't want the CIA saying to them, 'Don't testify.' I see no reason why an investigation can't be done after the deposition."
"Oh, that's ridiculous," Zanides said.
"I don't see anything ridiculous about it," Cahn retorted.
"Would you look to the CIA?" Peckham asked the prosecutor.
"I look anywhere I think there might be some information."
"That is troublesome," the judge said.
"Absolutely, I might look to the CIA."
"Is that troublesome?" Peckham inquired of the lawyers.
"Not to me," Zanides said. "I need to know. It may turn out that they may be telling the truth."
"It is very troublesome to us to have the CIA involved because I think our witnesses won't be there if that happens," Cahn said. "It seems our witnesses should be afforded the same degree of protection that the government's informants are afforded."
"That just doesn't add up," Zanides said.
"There is a far more dangerous situation in Costa Rica than an informant has in the United States!" Cahn said.
Peckham gently intervened. "They fear, you see, that there will be disclosures made," the judge explained to Zanides. "And again, I don't accept this because I have no evidence. So by my saying it, I don't want it understood that I am finding what I say to be fact. They are afraid. Just like you are afraid about the safety of informants, they are afraid that if the CIA is, in fact, financing these people that they will not want it disclosed and that they will take measures to make certain people don't get funding or be advised strongly not to cooperate. I don't know if you have control over that."
"So the fear," Zanides asked, "is that the CIA is going to bring some pressure on these people not to testify, is that it?"
"That's very much the fear," Cahn said. "And I think it is a realistic fear in this case."
"I don't see any evidence. . .1 can't even respond to that," Zanides argued. "What is the evidence the CIA—"
"That is fairly well documented," Iverson interjected. "I don't think there is any question that they are down there and intimately involved with the group that is trying to overthrow the Sandinista government."
"All we are saying," Judge Peckham told Zanides, "is that nobody should discourage them from testifying in this proceeding by way of deposition. I don't know what is so horrendous about that."
Peckham granted the defense lawyer's motion to fly to Costa Rica during mid-August "for the purpose of taking depositions of Francisco Aviles Saenz and Vicente Rappaccioli Marquis." He instructed the government to pay $5,000 in travel expenses for the attorneys.
Six days later the Costa Rican CIA station fired off a cable to Langley to warn that a federal prosecutor and an FBI agent were planning a trip to San Jose "to question two anti-Sandinistas in connection with the prosecution of a cocaine trafficking case." The problem, the station told Langley, is that both Aviles and Rappaccioli were Contra officials and belonged to an organization that had "unwittingly received CIA support."
Both men were also CIA assets, the station said. Langley was advised to search its files for anything it had on them and their connection to the cocaine traffickers, and the cable ended by saying that the CIA station was "concerned that this kind of uncoordinated activity (i.e. the assistant U.S. attorney and FBI visit and depositions) could have serious implications for anti-Sandinista activities in Costa Rica and elsewhere."
CIA headquarters discovered that Aviles was indeed a Contra official and had attended an August 1982 conference in Miami, where he was elected to the board of directors of the PCNE, which was receiving CIA money.
Various branches of the CIA were alerted, and the agency sprang into action. The Justice Department and the federal prosecutor handling the Zavala case, CIA officials decided, needed to be "discreetly approached."
On August 3, 1984, CIA headquarters instructed the Costa Rican station to keep away from Aviles and Rappaccioli, "to avoid giving Zavala's defense attorneys a possible issue." Langley reassured the nervous Costa Rican station that "there was no reason to believe that Zavala's attorneys knew Rappaccioli had any association with CIA." The whole thing could just blow over "if planned legal action is successful," the cable said.
CIA lawyer Lee S. Strickland flew into San Francisco from Washington, and on August 7, 1984, he sat down with prosecutor Mark Zanides and had what Zanides recalled as an "opaque conversation" with him. The CIA, Strickland told him, "would be immensely grateful if these depositions did not go forward." But Strickland "provided little or no explanation regarding what the CIA's interests were in the case," Zanides said. Strickland appeared "very concerned about the public identification of the individuals who were to be deposed."
There was one problem, however. Neither the CIA nor the prosecutor knew what was in the letters the Contras sent to the judge. Before they could do anything, they needed to see those letters.
That afternoon Zanides filed a motion asking Peckham to unseal the Contras' letters so government lawyers could read them. "Keeping it under seal at this point would result only in preventing the counsel for the United States from preparing properly for the deposition," he wrote. "At present the government is undertaking an inquiry with respect to the identities of these persons and counsel for the government is attempting to ascertain precisely what the facts are."
At a hearing the next day, Zanides wanted to clarify the government's position. When he asked for the records to be unsealed, he told Peckham, he hadn't meant for the general public to be able to read them. All he was asking for was that the documents be shown to government lawyers under a protective order.
Judge Peckham bristled at the prosecutor's suggestion.
"I think it ought to be made public," he said. "Why should we not make it public? What is there left to keep—"
"Your Honor," Zanides interrupted, "before I could comment on that—"
But the judge abruptly cut off the prosecutor.
"I am going to make it public. If it is unsealed it is going to be public," he warned.
"Well, as Your Honor knows, I can't comment since I really haven't seen those materials," Zanides said.
"I am ordering it made public. It is unsealed," the judge said. "I don't have to put it that way. I will just order it unsealed."
"Very well," Zanides replied. "May I obtain a copy from your clerk this morning?"
"Certainly," the judge said, taking out his pen. "So I will sign this. . .there is no restriction on the public disclosure of this."
When Strickland and Zanides saw the letters the two CIA operatives had sent to Peckham, their faces must have fallen. They had put the Contras right in the middle of the biggest cocaine bust in California history. Zanides went running back to Judge Peckham with a request that he make the documents secret again, until the government could make a private "presentation to the court why the record re Costa Rica depositions should not be made public." Zavala's attorneys weren't invited.
Whatever the Justice Department told Peckham during the private meeting in his chambers, it worked. Peckham issued an order that afternoon sealing up the records he'd made public only that morning. Five days later Zanides filed a three-paragraph agreement that said simply that the "United States will not introduce the $36,020 in United States currency seized from the residence of Julio Zavala" and "agrees to return said currency to Julio Zavala." In exchange, the agreement stated, Zavala would not press the issue of the Costa Rican depositions.
"As the matter stands now," a CIA cable stated, "CIA equities are fully protected." The cable bemoaned the fact that both Aviles and Rappaccioli "planned to testify at their deposition as to the source of the money in question.
We can only guess at what other testimony may have been forthcoming."
A U.S. embassy official in Costa Rica, after hearing that the depositions had been called off, quipped that they "had been canceled by The Funny Farm." His remark quickly got back to Langley, which instructed its Costa Rican agents to tell the diplomat "that CIA had no hand in cancellation of the trip."
Years later, when questioned about the case by the author, former U.S. Attorney Russoniello said the only reason he agreed to return the drug dealer's cash was because it would have cost the government too much money to go to Costa Rica and take two depositions. There never was any evidence to suggest that the Contras were involved with the drug ring, he insisted. But even the Justice Department's Inspector General didn't buy that. After questioning Russioniello, the IG concluded that the CIA had intervened with the prosecutor because of "a desire to protect the public image of the Contras or the CIA. . .the CIA considered the potential press coverage of a Contra-drug link to be a sufficient reason to attempt to influence the decision to return the money to Zavala." CIA cables further described Russioniello as "most deferential to our interests."
In addition, there was a stack of telephone records linking the Contras directly to the drug ring, which Russioniello never released or publicly admitted. "A defendant in the Frogman case had made 51 phone calls to the FDN office in San Francisco," a secret 1987 DEA report states, noting that one of its confidential informants had met with the traffickers at the FDN's office.
The FBI agent who investigated the case, David Alba, had little doubt the CIA was behind Russioniello's decision to give back the drug money. "Zavala or someone he was working with was involved with the CIA," Alba told Justice Department inspectors in 1997.
Even after the depositions were canceled, the agency continued to fret that its dirty secrets would somehow leak out. CIA officials were instructed to "monitor the prosecution closely so that any further disclosures or allegations by defendant or his confidants can be deflected." CIA lawyer Strickland argued in a memo that the Costa Rican station "must be made aware of the potential for disaster. While the allegations may be entirely false, there are sufficient factual details which would cause certain damage to our image and program in Central America." A memo from CIA general counsel Stanley Sporkin observed, "This matter raises obvious questions concerning the people we are supporting in Central America."
In a lengthy cable to the Costa Rican station on August 24, 1984, Strickland detailed his concerns. "While this particular aspect was successfully resolved, the possibility of potential damage to CIA interests was not lost on the U.S. Attorney or headquarters. By virtue of Rappaccioli's relationship as a former covert action asset and a member of board of directors of a Contra organization, Aviles' role as director of the Contra support group office in San Jose, and their formal claim of drug-tainted money, case could be made that CIA funds are being diverted by CIA assets into the drug trade," he wrote. "Indeed, close relationship between Zavala, a convicted drug dealer, and Rappaccioli and Aviles could prove most damaging especially if any relationship, no matter how indirect, were to continue. As long as Rappaccioli and Aviles continue to play any role in the anti-Sandinista movement, any public disclosure of the foregoing would have as a certain element the fact that they were 'linked to' or 'assets of' CIA."
Strickland told the Costa Rican station to look into whether the Contras were dealing drugs but warned "no action other than discreet inquiries should be undertaken without headquarters approval."
What the CIA found was censored from the report, but the agency clearly didn't cut its ties with the two Nicaraguans. Aviles, in 1985, was appointed to the general staff of UDN-FARN. A 1988 State Department biography of Vicente Rappaccioli identified him as the secretary of the Contras' political division. Incredibly, the 1998 CIA Inspector General's report that contained all the cables claimed Aviles and Rappaccioli really hadn't worked for the CIA after all. The repeated references to them as CIA assets in the 1984 cables were mistakes, the IG claimed.
In October 1984 the federal government returned $36,020 to Aviles and Zavala. And not a moment too soon: eight days after the check was issued, the U.S. Congress—outraged by the disclosure that the CIA and the Contras had dropped antiship mines in Nicaraguan harbors—cut off all CIA funding for the Contras.
Despite the CIA's efforts to keep Contra involvement in the so-called Frogman case from becoming public, some of the truth got out when Carlos Cabezas took the witness stand in late 1984 against his ex-brother-in-law. Under oath, and as a U.S. government witness, Cabezas admitted that some of the cocaine money was going to the Contras. He told the jury of his meetings with Horacio Pereira, and of Pereira's nervousness over the Contras' profits being misspent by the hard-drinking Zavala. Pages from the ledger books in which Cabezas kept track of the Contras' cocaine were introduced into evidence and made public, showing cocaine transactions with Contra official Fernando Sanchez.
Zavala was convicted of trafficking and sentenced to prison. Cabezas's testimony went unchallenged. It also went unreported. Though the San Francisco news media had fairly swooned when Cabezas and Zavala were arrested, not a single reporter stuck around to cover the trial. The evidence of Contra involvement in cocaine trafficking in San Francisco would lie undisturbed in a federal court file for another two years.
Dark Alliance: The CIA, the Contras ..., by Gary Webb
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Part 1 of 2
"They were doing their patriotic duty”
Unlike Carlos Cabezas, who walked into an existing cocaine sales operation and began dealing dope the next day, Danilo Blandon was forced to make his own way, finding his own buyers in a city he really didn't know. If he had been in San Francisco, it would have been a different story. Meneses's drug network there was well established and, according to Blandon, flourishing. After distributing 900 kilos—nearly one ton—in 1981, Blandon said, Meneses's business in San Francisco "got bigger and bigger, because all the family was working at that time with him, in the drug business."
By contrast, Meneses's network in Los Angeles was of more recent origin and had been dealt a serious blow in late 1981 with the arrest and subsequent flight of his West Covina dealer, Julio Bermudez, who had been moving about twenty kilos a month before he was arrested.
While Blandon struggled to establish a customer base, he made himself useful to the Meneses organization in other ways. He became "like a secretary for Mr. Meneses, because he already saw that I could do a lot for him. He started telling me, 'Go out and collect some money to somebody else in L.A.' and I started doing it, and he started getting trust, trusting in me."
Blandon said he would not only pick up money from customers in L.A. but deliver it as well, taking cash from Meneses to pay his cocaine suppliers in Los Angeles, men Blandon described as Colombians. He also began keeping the books for the L.A. drug operation, describing himself as Meneses's "administrator."
"I wasn't working with him in San Francisco. He was working alone," Blandon said. "I keeping the books from L.A."
"You were keeping his books in L.A.?" Blandon was asked.
"Yes."
"So he was up in San Francisco, and you're down here in L.A.?"
"Yes."
"So you were running his Los Angeles operation, isn't that correct?"
"Yes," Blandon said. "But remember, we were running just a—whatever we were running in L.A. goes—the profit is—was going to the Contra revolution. I don't know from San Francisco."
The relationship between Blandon and Meneses quickly transcended the cocaine business. Meneses opened up a restaurant on Hoover Street in East Los Angeles, which Blandon helped oversee, called the Chicalina. Blandon described the establishment somewhat curiously to a federal grand jury, calling it a "marketing" operation. "That was not my restaurant. That was Meneses's restaurant," he said, but he admitted that he'd told others he was one of the owners.
Another of Blandon's jobs involved looking after the welfare of Meneses's wife and children. Meneses had sent them from San Francisco to L.A. after he started yet another affair. In 1982, Blandon said, Meneses "was in love" with a woman in South San Francisco named Blanca Margarita Castano, a Nicaraguan who would later become his fifth wife.
Blanca was a cousin of a top Sandinista official, Bayardo Arce Castano, one of the Nicaraguan government's nine commandantes and one of the most hard¬ line radicals among them. Blanca's apartment near the Cow Palace, an old auditorium made famous by Jefferson Airplane, was used to store cocaine. "I went one time to pick it up right there," Blandon said.
A frequent houseguest of Meneses during this period was John Lacome, a San Franciscan who was friendly with Norwin's nephews, Jaime and Jairo. Lacome said he lived at Meneses's home for long periods during the early 1980s, and told of cocaine-fueled parties that went on for days. Meneses appeared totally unafraid of being arrested; "There was a woman he was selling to, and this woman would drive by his house, honk, and he'd come walking out to the street with two kilos in his hands, in broad daylight, and give them to her," Lacome said.
Meneses was fond of expensive leisure suits, wore a fairly obvious toupee, and took pains to surround himself with women, as did his nephews. A former girlfriend of Jaime Meneses, Gloria Lopez, said the nephews all drove flashy new cars, which they would trade in as soon as they tired of them. That was how she first noticed Jaime, she said. She was tending bar in the Mission District, and he would drive up in a different new car every couple weeks.
Lopez, who later had a child with Jaime Meneses, said Jaime started off driving trucks for his uncle Norwin right out of high school. Initially the loads were military uniforms; then he graduated to moving a more lucrative product— and started earning a substantially bigger paycheck.
"You give a kid like that out of high school all that money, and what do you think is going to happen?" Lopez asked. "I can't say that I blame Jaime for what he did. Then. I blame him for a lot of things that happened later though."
Jaime's father, Jaime Sr., was also pressed into service for the cause, hauling money to Central America for brother Norwin. "Jaime Sr., I respected him very much," Rafael Cornejo said. "He really wasn't too much involved with drugs. He had a brake factory in Nicaragua before the revolution, called FRICA. He was a very decent man. During, I can't remember which year, he was incarcerated in the U.S., 1984-85. . .. He'd been stopped at the border with $70,000 or something. He was taking the money down to Nicaragua. Once I told him, 'Look, Jaime, let me do that for you.' But he said, no, he could do just fine." Jaime Meneses Sr. was murdered in 1990 in the offices of his money-changing business—FRECERSA—in San Jose, Costa Rica.
Such were the hazards of being a Meneses. So it was not surprising that when Maritza Meneses and her children arrived in L.A. in 1982, someone would be assigned to watch over them and help them along. Norwin gave Danilo the job.
In August 1982 Blandon and Maritza Meneses set up a business together in Los Angeles, a company they named JDM Artwork Inc. The name was an acronym made up of the first initials of the incorporators' first names: Josefa Maria Pelligatti, a friend of the Meneseses; Danilo Blandon; and Maritza Meneses.
The company did silk screen printing, and Blandon said it was started by Meneses to provide an income for his relocated family. But there may have been other motives behind Meneses's investment in the silk-screening business. The company quickly became part of the Contras' support network in Los Angeles. ARDE commander Eden Pastora said he visited the firm during a trip he made to L.A. in 1982, and it printed up T-shirts with his likeness on them. Former Pastora aide Carol Prado claimed that a Los Angeles printing company connected to Blandon was used to launder money from drug sales for the Contras.
Another former associate of Blandon, a Puerto Rican man convicted of counterfeiting U.S. currency, believed that the company also dabbled in funny money, printing up fake twenty-dollar bills that provided operating cash for the FDN. The former associate produced Polaroid photographs that showed him at work in an office with FDN banners and slogans on the wall, and a picture of Blandon in the same office, smiling, his arms thrown over the shoulders of other laughing Hispanic men. A blue-and-white FDN flag was clearly visible on the wall.
The associate's claims of counterfeiting could not be independently corroborated, but according to CIA cables filed in federal court, the CIA had information by 1984 that Norwin Meneses was involved in counterfeiting—both American dollars and Costa Rican colones. In a 1986 interview, Meneses said he allowed FDN members to use his wife's Los Angeles T-shirt factory as a meeting place.
As the Contra support organizations in San Francisco and L.A. grew more active, Meneses's role with the FDN became much more public. Former FDN director Edgar Chamorro told the San Francisco Examiner in 1986 that he and FDN director Frank Arana flew to San Francisco in October 1982 to select local leaders for the FDN's support committee there. Meneses attended the organizational meeting, standing quietly in the back of the auto body shop where the meeting was held. Meneses "appeared like a fund-raiser, an organizer," Chamorro told the paper. The next day, Chamorro said, Meneses helped set up a similar meeting in Los Angeles, providing refreshments beforehand and throwing a party afterward.
"He was one of the main contacts in L.A.," Chamorro told Examiner reporter Seth Rosenfeld. "He was in charge of the organization of the L.A. meeting, the reception. He drove us to the place. He gave us the schedule for that day. He knew people, he was recommending names" (for leadership positions in the L.A. organization).
Renato Pena Cabrera, the FDN's San Francisco representative, told federal investigators in 1997 that he was present "on many occasions" when Meneses telephoned FDN commander Enrique Bermudez in Honduras. "Meneses told Pena of Bermudez's requests for such things as gun silencers (which Meneses obtained in Los Angeles), cross bows, and other military equipment for the Contras." Meneses sometimes personally delivered the supplies to the Contras, Pena said; other times he had contacts in Miami and Los Angeles forward them to friendly Honduran authorities.
"Meneses would bring [back] military information, bulletins, and communiques from Bermudez that Pena would put into newsletters and give to the press and Contra sympathizers," a summary of Pena's interview states.
In a recent interview with the CIA, Meneses said that "between 1983 and 1984, his primary role with the California sympathizers was to help recruit personnel for the movement. Meneses says he was asked by Bermudez to attempt to recruit Nicaraguans in exile and others who were supporters of the Contra movement." The drug lord told the agency's internal investigators that "he was not directed to recruit people with any specific skills, such as pilots or doctors, but was simply told to seek out anyone who wanted to join with the FDN. Meneses states that he was a member of an FDN fund-raising committee, but was not the committee's head." He did not raise much cash but was "involved in 1985 in attempting to obtain material support, medical and general supplies" for the Contras.
When asked by the author in 1996 where he got the money to pay for these war materials, Meneses gave a slight smile. "There was money available for these purchases," he said.
Meneses associate Rafael Cornejo said he attended some of the parties Meneses hosted for the FDN at his homes in the San Francisco area.
"You can say what you want about that man, but his heart and soul was into the movement, and that was his priority more than anything else," said Cornejo, whose father had been a sergeant in Somoza's National Guard. "It's kind of hard to be kicked out of your own country and that's what his passion was. He was straight-up pro-Somocista."
Blandon complained that Meneses was so tightfisted with the cash he was raising for the Contras that he was making little or no money selling cocaine. "I didn't make any money, you know. It was only for the people in the mountains, you know, for the Contra Revolution," Blandon said. Meneses allowed him to keep enough "just to pay the rent and to pay the food for my daughter. . .just to pay my expenses." Among the Nicaraguan exile community, it was strongly suspected that Meneses was dealing cocaine for the Contras. And it was not unadmired. Somoza's former secretary, Juan C. Wong, one of the first Nicaraguan exiles to begin recruiting ex-Guardia men to join the Contras, said he visited Meneses in San Francisco in 1983. "It's true, it was widely spread around that he was involved with drugs," said Wong, a University of San Francisco grad who knew the Meneses family from before the revolution. "And I don't doubt that they wanted to raise money for the FDN. That's only natural. They were doing their patriotic duty."
Bradley Brunon, Blandon's lawyer, said Blandon was one of several former Somoza supporters dealing cocaine in L.A. in the early 1980s. He met Blandon while defending a middle-class Nicaraguan exile accused of drug trafficking. "People were being arrested who had high government connections, or high military connections, in the Somoza regime, who didn't have any particular lifestyle consistent with being cocaine dealers, didn't have a background consistent with that, but they were highly politicized individuals," Brunon said. "And the only politics I was aware that they were involved with was this attempt to fund the Contra revolutionary insurgency."
Brunon said it was his understanding that "the Contras, and I don't even know if they were known as that then. . .had no above-the-line funding. Everything was sub rosa and one of the ways they were trying to raise money was importing cocaine. That was information that I didn't specifically receive from Blandon, but that I had surmised based on a series of events that were happening."
Blandon was fairly close-mouthed about his role with the Contras, according to Brunon. "I don't know the formal particulars of it other than there was this kind of atmosphere of CIA and clandestine activities and so forth that surrounded him when I met him," Brunon said of his longtime client. "He never was specific. I mean, I believed he was involved with the Contras. I don't think there's any doubt about that. Beyond that, I never got into the particulars with him, because I didn't have a need to know at that point."
An air of mystery also surrounded another associate of Blandon, an odd, cherubic, balding man in his mid-thirties Blandon picked up as a partner shortly after going to work for Meneses. The man would remain at Blandon's side for seven years, though mostly in the shadows. Considering his work history and the activities he was involved with at the time, his appearance in the Nicaraguan's cocaine trafficking entourage is both strange and worrisome. He would give Blandon's drug ring a whole new sideline—weapons and sophisticated electronics equipment—and a whole new smell, the unmistakable aroma of the U.S. intelligence community.
Brad Brunon met him in 1986, when he showed up unannounced at the lawyer's office and began asking very detailed questions about Blandon's background. "It was just like the hair on the back of your neck goes up. What does this guy want? What's he doing here? Is he investigating Blandon?" Brunon said. "I never knew what his true role was. I mean, he covertly insinuated that he was CIA. At least, if not a sworn member, whatever the hell they do to get to become employees—some sort of operative." Brunon "really didn't have much communication with the guy because he scared me."
His name was Ronald Jay Lister, a southern California native who began working as a cocaine dealer and money hauler for Blandon in late 1981 or early 1982, just as the CIA was taking over the funding and operations of the newly formed FDN. The CIA has publicly denied any relationship with the man.
Before launching his life of crime as Danilo Blandon's faithful sidekick, Ronald Lister had been a police officer of one sort or another for nearly fifteen years. He'd started out as a military policeman for the U.S. Army and U.S. Army Reserve, stationed in Orange County with the 414th Military Police company. His service records show he had a degree in political science and was trained in processing prisoners of war captured during the Vietnam conflict. He regularly received excellent fitness reports. While an army reservist, Lister hired on as an officer with the police department of Maywood, a small suburb of Los Angeles that once employed a handful of uniformed patrolmen. He was also a reserve deputy for the L.A. County Sheriff's Office at the same time.
Lister was called to active duty in the army for a few months in 1969, and later, when his enlistment ended, he volunteered for the U.S. Coast Guard, serving as a reserve port security officer at Terminal Island, in San Pedro, California. In late 1973 he found a home with the Laguna Beach Police Department, which patrols a posh Orange County suburb south of Los Angeles. There, among the rich and famous, he rose through the ranks to become a detective in the burglary division.
Lieutenant Danielle Adams said Lister was a veteran by the time she arrived in burglary; her recollection of him was that he was "always very successful, very tenacious and got the job done."
His former chief, Neil Purcell, who was on the hiring board that gave Lister his job, remembers him differently. "You hear lots of things about Ron Lister," Purcell said. "The man, in my opinion, is a lying, conniving, manipulative person who likes to play with people's minds. He's very evasive and loves living on the edge. He's the biggest bullshitter that has ever been placed on this earth." Toward the end of Lister's twelve-year stint with the police department, he was traveling in some pretty fast company. "When he worked here, that silly son of a gun was in with—what do they call themselves?—the Royal Highnesses from Iran!" Purcell recalled with a hoot. "Sporting Rolex watches for himself and his wife. Getting wined and dined by these people until finally they [the Iranians] were asked to leave this country. Anything. He threw out names and organizations. He's a very bright guy. As far as intelligence, he's very, very smart." It was the one point upon which Adams and Purcell agreed.
"Don't ever underestimate him," Adams warned. "He's very, very bright and very tenacious."
Both Adams and Purcell said Lister became involved in private security work on the side toward the end of 1979. He quit the Laguna Beach police department in May 1980 to pursue that vocation full-time. "He was in the alarm business, is what he originally started off as," Adams recalled. "And he had some muckety- mucks from the Arab countries, so he says, in his alarm business and this was getting pretty elaborate, and that's when he left the police department. I know there was a lot of involvement and a lot of travel while he was still here."
A few weeks before he resigned, corporate records show, Lister incorporated a company called Pyramid International Security Consultants Inc., based in Newport Beach. What Pyramid was doing between 1980 and 1981 is not known, but Lister stated that this was around the time he first met Blandon, "through a Beverly Hills business connection." He said Blandon introduced him to Norwin Meneses, and that he "provided physical security for both men," who "always paid him in cash."
Soon after Lister paired up with Blandon and Meneses, his security company began doing business overseas. Blandon told Justice Department interviewers that he and Meneses "entered into an informal partnership [with Lister] for the purpose of selling weapons abroad," specifically in El Salvador. Blandon said the plan was for Lister, Blandon, and Meneses "to get their share of the profits in weapons, which they would then give to the Contras."
Blandon's attorney, Brad Brunon, described Lister as "one of these guys who would boast about having bugging capabilities, would boast about having wiretap capabilities, you could get any information any time, one of those. . .1- can-uplink-to-the-satellite sort of guy."
Christopher W. Moore, a former reserve Laguna Beach police officer who met Lister in 1979, said Lister hired him as an office manager in 1982 while Moore was working his way through law school. "I think I was actually an officer in Pyramid International. Ron put my name down as treasurer or director or something because he needed to have some directors for the incorporation papers." Moore confirmed that Lister had extensive business dealings in Central America, specifically in El Salvador. Lister explained his travels there to Moore as involving gun running and "helping the Contras, supposedly on behalf of the [U.S.] government. I remember the longest conversations with him—Tm protected. You're working for the government. Don't worry about anything. I'm protected, I'm protected.' I don't know if that was true or not, but I do know that we stopped worrying about domestic security jobs and started concentrating on foreign ones."
During the early 1980s, when Lister began doing business there, El Salvador was wracked by a vicious civil war and murderous political repression. A tenacious revolutionary guerrilla group, the FMLN, had been running circles around the country's corrupt and inefficient military. The rebels' fight was being assisted by the Sandinistas in Nicaragua, who have admitted supplying them with tons of Eastern Bloc arms and ammunition.
The Reagan administration was far more concerned about what was happening in El Salvador than they were about Nicaragua, which Reagan's advisers considered already "lost" to the Communists. One of Reagan's top foreign policy objectives in 1981 and 1982 was to keep what had happened in Nicaragua from spreading to El Salvador, and the administration pushed hard for increased military and economic support for the beleaguered Salvadoran government, particularly after a January 1982 rebel attack on the main military airport in El Salvador demolished dozens of aircraft.
"Indeed, what came to be known years later as the 'Reagan Doctrine' may have been born in El Salvador in 1982," former Reagan State Department official Robert Kagan wrote in 1996. Halting Sandinista arms shipments to El Salvador was the official reason CIA director William Casey gave to Congress when he informed lawmakers of Reagan's decision in late 1981 to turn the CIA loose in Nicaragua. The Contras were being trained to police the borders to make sure no Sandinista arms got out to the FMLN, Casey claimed.
Like many of the things the CIA said about the Contras, that explanation was a lie, a smoke screen to hide the agency's true agenda, which was to run a full- scale covert war against the Sandinistas. The Reagan administration found its Salvadoran aid program a tough sell in Congress because of the horrendous human rights abuses then occurring in the country. Frustrated by its inability to crush the FMLN guerrillas in the field despite an overwhelming firepower advantage, elements of the Salvadoran government were striking back at the rebels by murdering thousands of their supporters with death squads—right- wing, quasi-military posses that would snatch suspected rebel sympathizers off the streets and leave their mutilated bodies on the outskirts of town a few days later. At the height of this campaign, residents of the capital city of San Salvador would wake up to find forty new bodies every morning.
The Salvadoran government officially denied any connection with the death squads, but the denials rang hollow in Washington, even among Reagan's stalwarts. "Under the guise of anti-Communism, the death squads terrorized the entire country—murdering nuns, teachers, labor organizers, political opponents and thousands of other civilians," Lieutenant Colonel Oliver North wrote in his 1991 memoirs, Under Fire.
North wrote that it was clear most of the death squad activity was the responsibility of the ultraright ARENA party and its leader, former Salvadoran army major Roberto D'Aubuisson. D'Aubuisson was reportedly running one of the death squads linked to the assassination of San Salvador's Archbishop Oscar Romero—allegedly by hit men from the FDN's predecessor, the Legion of September 15.
The official whose men were committing some of the worst abuses was a $90,000-a-year CIA asset, Colonel Nicholas Carranza, head of the government's feared Treasury Police. According to one account, CIA director Casey met personally with Carranza in the summer of 1983 and told him to "knock it off," or the CIA would kick him off the payroll.
In phone conversations with Lister, Christopher Moore learned that his boss was "supposedly doing security consulting for the government of El Salvador." In June of 1982 Lister asked Moore to fly down and "babysit" a government contract for a few days while Lister returned to the United States to take care of some unspecified business.
Moore agreed, and was off on what he would call the strangest trip of his life.
Accompanying him on the eleven-day excursion, Moore said, was a man who introduced himself as the Salvadoran consul in Los Angeles. Since Moore spoke little Spanish, the man served as Moore's guide and interpreter. "They flew me down to this airbase that the French were building, and I had to take pictures of it," Moore said; it was his impression that Pyramid was bidding on a contract to provide security for the base. When he returned to El Salvador's capital, San Salvador, he settled into the downtown Ramada Inn. Then he and the Salvadoran consul attended a series of meetings with none other than Major Roberto D'Aubuisson. "That was probably the highlight of my life at that point," chuckled Moore, now an attorney in Los Angeles. "There I was, a reserve police officer who'd only been in the country for a couple days, and I was sitting in this office in downtown San Salvador across the desk from the man who ran the death squads. He had a gun lying on the top of his desk and had these filing cabinets pushed up against the windows of the office so nobody could shoot through them."
At another meeting, Moore and D'Aubuisson were joined by Ray Prendes, the newly elected head of the Salvadoran Assembly and a powerful figure in the ruling Christian Democratic party. Prendes was on friendly terms with D'Aubuisson, Moore said, and both appeared to have some role in the award of the security contract Lister was seeking.
Lister, in an interview with police, "said that Moore was a good kid who had gone down to El Salvador to take pictures of poorly planned and constructed security work at a port on the southwest tip of El Salvador."
Moore was unsure if Lister's company ever got the security contract for the airbase, but he thought not. He left Lister's employ in 1983, soon after his boss began dealing in heavy weapons. "Ron was an arms dealer and was buying these semiautomatics, the ones the bad guys use, called MAC-lOs. He also had semiautomatic Uzis, and he had gotten involved in selling something called RAW, which was a rifle-fired hand grenade. He was into a lot of things."
Moore wasn't exaggerating. Between 1983 and 1986, the FBI opened up five separate investigations of Lister, all of which dealt with allegations of trafficking in illegal weapons and high-tech devices with foreign governments. In September 1983, Lister's and Blandon's company, Pyramid International, came under FBI scrutiny for Neutrality Act violations, which allegedly involved "the sale of weapons to El Salvador and the loan of money from Saudi Arabia to the Salvadoran government. Lister was also alleged to be attempting to sell arms to several other countries." Considering the fact that the Saudi government was heavily involved in financing covert operations for the Reagan Administration during the 1980s, it is perhaps not surprising that "no further information was ever developed" by the FBI. The Justice Department offered no explanation for why that probe was abandoned.
"They were doing their patriotic duty”
Unlike Carlos Cabezas, who walked into an existing cocaine sales operation and began dealing dope the next day, Danilo Blandon was forced to make his own way, finding his own buyers in a city he really didn't know. If he had been in San Francisco, it would have been a different story. Meneses's drug network there was well established and, according to Blandon, flourishing. After distributing 900 kilos—nearly one ton—in 1981, Blandon said, Meneses's business in San Francisco "got bigger and bigger, because all the family was working at that time with him, in the drug business."
By contrast, Meneses's network in Los Angeles was of more recent origin and had been dealt a serious blow in late 1981 with the arrest and subsequent flight of his West Covina dealer, Julio Bermudez, who had been moving about twenty kilos a month before he was arrested.
While Blandon struggled to establish a customer base, he made himself useful to the Meneses organization in other ways. He became "like a secretary for Mr. Meneses, because he already saw that I could do a lot for him. He started telling me, 'Go out and collect some money to somebody else in L.A.' and I started doing it, and he started getting trust, trusting in me."
Blandon said he would not only pick up money from customers in L.A. but deliver it as well, taking cash from Meneses to pay his cocaine suppliers in Los Angeles, men Blandon described as Colombians. He also began keeping the books for the L.A. drug operation, describing himself as Meneses's "administrator."
"I wasn't working with him in San Francisco. He was working alone," Blandon said. "I keeping the books from L.A."
"You were keeping his books in L.A.?" Blandon was asked.
"Yes."
"So he was up in San Francisco, and you're down here in L.A.?"
"Yes."
"So you were running his Los Angeles operation, isn't that correct?"
"Yes," Blandon said. "But remember, we were running just a—whatever we were running in L.A. goes—the profit is—was going to the Contra revolution. I don't know from San Francisco."
The relationship between Blandon and Meneses quickly transcended the cocaine business. Meneses opened up a restaurant on Hoover Street in East Los Angeles, which Blandon helped oversee, called the Chicalina. Blandon described the establishment somewhat curiously to a federal grand jury, calling it a "marketing" operation. "That was not my restaurant. That was Meneses's restaurant," he said, but he admitted that he'd told others he was one of the owners.
Another of Blandon's jobs involved looking after the welfare of Meneses's wife and children. Meneses had sent them from San Francisco to L.A. after he started yet another affair. In 1982, Blandon said, Meneses "was in love" with a woman in South San Francisco named Blanca Margarita Castano, a Nicaraguan who would later become his fifth wife.
Blanca was a cousin of a top Sandinista official, Bayardo Arce Castano, one of the Nicaraguan government's nine commandantes and one of the most hard¬ line radicals among them. Blanca's apartment near the Cow Palace, an old auditorium made famous by Jefferson Airplane, was used to store cocaine. "I went one time to pick it up right there," Blandon said.
A frequent houseguest of Meneses during this period was John Lacome, a San Franciscan who was friendly with Norwin's nephews, Jaime and Jairo. Lacome said he lived at Meneses's home for long periods during the early 1980s, and told of cocaine-fueled parties that went on for days. Meneses appeared totally unafraid of being arrested; "There was a woman he was selling to, and this woman would drive by his house, honk, and he'd come walking out to the street with two kilos in his hands, in broad daylight, and give them to her," Lacome said.
Meneses was fond of expensive leisure suits, wore a fairly obvious toupee, and took pains to surround himself with women, as did his nephews. A former girlfriend of Jaime Meneses, Gloria Lopez, said the nephews all drove flashy new cars, which they would trade in as soon as they tired of them. That was how she first noticed Jaime, she said. She was tending bar in the Mission District, and he would drive up in a different new car every couple weeks.
Lopez, who later had a child with Jaime Meneses, said Jaime started off driving trucks for his uncle Norwin right out of high school. Initially the loads were military uniforms; then he graduated to moving a more lucrative product— and started earning a substantially bigger paycheck.
"You give a kid like that out of high school all that money, and what do you think is going to happen?" Lopez asked. "I can't say that I blame Jaime for what he did. Then. I blame him for a lot of things that happened later though."
Jaime's father, Jaime Sr., was also pressed into service for the cause, hauling money to Central America for brother Norwin. "Jaime Sr., I respected him very much," Rafael Cornejo said. "He really wasn't too much involved with drugs. He had a brake factory in Nicaragua before the revolution, called FRICA. He was a very decent man. During, I can't remember which year, he was incarcerated in the U.S., 1984-85. . .. He'd been stopped at the border with $70,000 or something. He was taking the money down to Nicaragua. Once I told him, 'Look, Jaime, let me do that for you.' But he said, no, he could do just fine." Jaime Meneses Sr. was murdered in 1990 in the offices of his money-changing business—FRECERSA—in San Jose, Costa Rica.
Such were the hazards of being a Meneses. So it was not surprising that when Maritza Meneses and her children arrived in L.A. in 1982, someone would be assigned to watch over them and help them along. Norwin gave Danilo the job.
In August 1982 Blandon and Maritza Meneses set up a business together in Los Angeles, a company they named JDM Artwork Inc. The name was an acronym made up of the first initials of the incorporators' first names: Josefa Maria Pelligatti, a friend of the Meneseses; Danilo Blandon; and Maritza Meneses.
The company did silk screen printing, and Blandon said it was started by Meneses to provide an income for his relocated family. But there may have been other motives behind Meneses's investment in the silk-screening business. The company quickly became part of the Contras' support network in Los Angeles. ARDE commander Eden Pastora said he visited the firm during a trip he made to L.A. in 1982, and it printed up T-shirts with his likeness on them. Former Pastora aide Carol Prado claimed that a Los Angeles printing company connected to Blandon was used to launder money from drug sales for the Contras.
Another former associate of Blandon, a Puerto Rican man convicted of counterfeiting U.S. currency, believed that the company also dabbled in funny money, printing up fake twenty-dollar bills that provided operating cash for the FDN. The former associate produced Polaroid photographs that showed him at work in an office with FDN banners and slogans on the wall, and a picture of Blandon in the same office, smiling, his arms thrown over the shoulders of other laughing Hispanic men. A blue-and-white FDN flag was clearly visible on the wall.
The associate's claims of counterfeiting could not be independently corroborated, but according to CIA cables filed in federal court, the CIA had information by 1984 that Norwin Meneses was involved in counterfeiting—both American dollars and Costa Rican colones. In a 1986 interview, Meneses said he allowed FDN members to use his wife's Los Angeles T-shirt factory as a meeting place.
As the Contra support organizations in San Francisco and L.A. grew more active, Meneses's role with the FDN became much more public. Former FDN director Edgar Chamorro told the San Francisco Examiner in 1986 that he and FDN director Frank Arana flew to San Francisco in October 1982 to select local leaders for the FDN's support committee there. Meneses attended the organizational meeting, standing quietly in the back of the auto body shop where the meeting was held. Meneses "appeared like a fund-raiser, an organizer," Chamorro told the paper. The next day, Chamorro said, Meneses helped set up a similar meeting in Los Angeles, providing refreshments beforehand and throwing a party afterward.
"He was one of the main contacts in L.A.," Chamorro told Examiner reporter Seth Rosenfeld. "He was in charge of the organization of the L.A. meeting, the reception. He drove us to the place. He gave us the schedule for that day. He knew people, he was recommending names" (for leadership positions in the L.A. organization).
Renato Pena Cabrera, the FDN's San Francisco representative, told federal investigators in 1997 that he was present "on many occasions" when Meneses telephoned FDN commander Enrique Bermudez in Honduras. "Meneses told Pena of Bermudez's requests for such things as gun silencers (which Meneses obtained in Los Angeles), cross bows, and other military equipment for the Contras." Meneses sometimes personally delivered the supplies to the Contras, Pena said; other times he had contacts in Miami and Los Angeles forward them to friendly Honduran authorities.
"Meneses would bring [back] military information, bulletins, and communiques from Bermudez that Pena would put into newsletters and give to the press and Contra sympathizers," a summary of Pena's interview states.
In a recent interview with the CIA, Meneses said that "between 1983 and 1984, his primary role with the California sympathizers was to help recruit personnel for the movement. Meneses says he was asked by Bermudez to attempt to recruit Nicaraguans in exile and others who were supporters of the Contra movement." The drug lord told the agency's internal investigators that "he was not directed to recruit people with any specific skills, such as pilots or doctors, but was simply told to seek out anyone who wanted to join with the FDN. Meneses states that he was a member of an FDN fund-raising committee, but was not the committee's head." He did not raise much cash but was "involved in 1985 in attempting to obtain material support, medical and general supplies" for the Contras.
When asked by the author in 1996 where he got the money to pay for these war materials, Meneses gave a slight smile. "There was money available for these purchases," he said.
Meneses associate Rafael Cornejo said he attended some of the parties Meneses hosted for the FDN at his homes in the San Francisco area.
"You can say what you want about that man, but his heart and soul was into the movement, and that was his priority more than anything else," said Cornejo, whose father had been a sergeant in Somoza's National Guard. "It's kind of hard to be kicked out of your own country and that's what his passion was. He was straight-up pro-Somocista."
Blandon complained that Meneses was so tightfisted with the cash he was raising for the Contras that he was making little or no money selling cocaine. "I didn't make any money, you know. It was only for the people in the mountains, you know, for the Contra Revolution," Blandon said. Meneses allowed him to keep enough "just to pay the rent and to pay the food for my daughter. . .just to pay my expenses." Among the Nicaraguan exile community, it was strongly suspected that Meneses was dealing cocaine for the Contras. And it was not unadmired. Somoza's former secretary, Juan C. Wong, one of the first Nicaraguan exiles to begin recruiting ex-Guardia men to join the Contras, said he visited Meneses in San Francisco in 1983. "It's true, it was widely spread around that he was involved with drugs," said Wong, a University of San Francisco grad who knew the Meneses family from before the revolution. "And I don't doubt that they wanted to raise money for the FDN. That's only natural. They were doing their patriotic duty."
Bradley Brunon, Blandon's lawyer, said Blandon was one of several former Somoza supporters dealing cocaine in L.A. in the early 1980s. He met Blandon while defending a middle-class Nicaraguan exile accused of drug trafficking. "People were being arrested who had high government connections, or high military connections, in the Somoza regime, who didn't have any particular lifestyle consistent with being cocaine dealers, didn't have a background consistent with that, but they were highly politicized individuals," Brunon said. "And the only politics I was aware that they were involved with was this attempt to fund the Contra revolutionary insurgency."
Brunon said it was his understanding that "the Contras, and I don't even know if they were known as that then. . .had no above-the-line funding. Everything was sub rosa and one of the ways they were trying to raise money was importing cocaine. That was information that I didn't specifically receive from Blandon, but that I had surmised based on a series of events that were happening."
Blandon was fairly close-mouthed about his role with the Contras, according to Brunon. "I don't know the formal particulars of it other than there was this kind of atmosphere of CIA and clandestine activities and so forth that surrounded him when I met him," Brunon said of his longtime client. "He never was specific. I mean, I believed he was involved with the Contras. I don't think there's any doubt about that. Beyond that, I never got into the particulars with him, because I didn't have a need to know at that point."
An air of mystery also surrounded another associate of Blandon, an odd, cherubic, balding man in his mid-thirties Blandon picked up as a partner shortly after going to work for Meneses. The man would remain at Blandon's side for seven years, though mostly in the shadows. Considering his work history and the activities he was involved with at the time, his appearance in the Nicaraguan's cocaine trafficking entourage is both strange and worrisome. He would give Blandon's drug ring a whole new sideline—weapons and sophisticated electronics equipment—and a whole new smell, the unmistakable aroma of the U.S. intelligence community.
Brad Brunon met him in 1986, when he showed up unannounced at the lawyer's office and began asking very detailed questions about Blandon's background. "It was just like the hair on the back of your neck goes up. What does this guy want? What's he doing here? Is he investigating Blandon?" Brunon said. "I never knew what his true role was. I mean, he covertly insinuated that he was CIA. At least, if not a sworn member, whatever the hell they do to get to become employees—some sort of operative." Brunon "really didn't have much communication with the guy because he scared me."
His name was Ronald Jay Lister, a southern California native who began working as a cocaine dealer and money hauler for Blandon in late 1981 or early 1982, just as the CIA was taking over the funding and operations of the newly formed FDN. The CIA has publicly denied any relationship with the man.
Before launching his life of crime as Danilo Blandon's faithful sidekick, Ronald Lister had been a police officer of one sort or another for nearly fifteen years. He'd started out as a military policeman for the U.S. Army and U.S. Army Reserve, stationed in Orange County with the 414th Military Police company. His service records show he had a degree in political science and was trained in processing prisoners of war captured during the Vietnam conflict. He regularly received excellent fitness reports. While an army reservist, Lister hired on as an officer with the police department of Maywood, a small suburb of Los Angeles that once employed a handful of uniformed patrolmen. He was also a reserve deputy for the L.A. County Sheriff's Office at the same time.
Lister was called to active duty in the army for a few months in 1969, and later, when his enlistment ended, he volunteered for the U.S. Coast Guard, serving as a reserve port security officer at Terminal Island, in San Pedro, California. In late 1973 he found a home with the Laguna Beach Police Department, which patrols a posh Orange County suburb south of Los Angeles. There, among the rich and famous, he rose through the ranks to become a detective in the burglary division.
Lieutenant Danielle Adams said Lister was a veteran by the time she arrived in burglary; her recollection of him was that he was "always very successful, very tenacious and got the job done."
His former chief, Neil Purcell, who was on the hiring board that gave Lister his job, remembers him differently. "You hear lots of things about Ron Lister," Purcell said. "The man, in my opinion, is a lying, conniving, manipulative person who likes to play with people's minds. He's very evasive and loves living on the edge. He's the biggest bullshitter that has ever been placed on this earth." Toward the end of Lister's twelve-year stint with the police department, he was traveling in some pretty fast company. "When he worked here, that silly son of a gun was in with—what do they call themselves?—the Royal Highnesses from Iran!" Purcell recalled with a hoot. "Sporting Rolex watches for himself and his wife. Getting wined and dined by these people until finally they [the Iranians] were asked to leave this country. Anything. He threw out names and organizations. He's a very bright guy. As far as intelligence, he's very, very smart." It was the one point upon which Adams and Purcell agreed.
"Don't ever underestimate him," Adams warned. "He's very, very bright and very tenacious."
Both Adams and Purcell said Lister became involved in private security work on the side toward the end of 1979. He quit the Laguna Beach police department in May 1980 to pursue that vocation full-time. "He was in the alarm business, is what he originally started off as," Adams recalled. "And he had some muckety- mucks from the Arab countries, so he says, in his alarm business and this was getting pretty elaborate, and that's when he left the police department. I know there was a lot of involvement and a lot of travel while he was still here."
A few weeks before he resigned, corporate records show, Lister incorporated a company called Pyramid International Security Consultants Inc., based in Newport Beach. What Pyramid was doing between 1980 and 1981 is not known, but Lister stated that this was around the time he first met Blandon, "through a Beverly Hills business connection." He said Blandon introduced him to Norwin Meneses, and that he "provided physical security for both men," who "always paid him in cash."
Soon after Lister paired up with Blandon and Meneses, his security company began doing business overseas. Blandon told Justice Department interviewers that he and Meneses "entered into an informal partnership [with Lister] for the purpose of selling weapons abroad," specifically in El Salvador. Blandon said the plan was for Lister, Blandon, and Meneses "to get their share of the profits in weapons, which they would then give to the Contras."
Blandon's attorney, Brad Brunon, described Lister as "one of these guys who would boast about having bugging capabilities, would boast about having wiretap capabilities, you could get any information any time, one of those. . .1- can-uplink-to-the-satellite sort of guy."
Christopher W. Moore, a former reserve Laguna Beach police officer who met Lister in 1979, said Lister hired him as an office manager in 1982 while Moore was working his way through law school. "I think I was actually an officer in Pyramid International. Ron put my name down as treasurer or director or something because he needed to have some directors for the incorporation papers." Moore confirmed that Lister had extensive business dealings in Central America, specifically in El Salvador. Lister explained his travels there to Moore as involving gun running and "helping the Contras, supposedly on behalf of the [U.S.] government. I remember the longest conversations with him—Tm protected. You're working for the government. Don't worry about anything. I'm protected, I'm protected.' I don't know if that was true or not, but I do know that we stopped worrying about domestic security jobs and started concentrating on foreign ones."
During the early 1980s, when Lister began doing business there, El Salvador was wracked by a vicious civil war and murderous political repression. A tenacious revolutionary guerrilla group, the FMLN, had been running circles around the country's corrupt and inefficient military. The rebels' fight was being assisted by the Sandinistas in Nicaragua, who have admitted supplying them with tons of Eastern Bloc arms and ammunition.
The Reagan administration was far more concerned about what was happening in El Salvador than they were about Nicaragua, which Reagan's advisers considered already "lost" to the Communists. One of Reagan's top foreign policy objectives in 1981 and 1982 was to keep what had happened in Nicaragua from spreading to El Salvador, and the administration pushed hard for increased military and economic support for the beleaguered Salvadoran government, particularly after a January 1982 rebel attack on the main military airport in El Salvador demolished dozens of aircraft.
"Indeed, what came to be known years later as the 'Reagan Doctrine' may have been born in El Salvador in 1982," former Reagan State Department official Robert Kagan wrote in 1996. Halting Sandinista arms shipments to El Salvador was the official reason CIA director William Casey gave to Congress when he informed lawmakers of Reagan's decision in late 1981 to turn the CIA loose in Nicaragua. The Contras were being trained to police the borders to make sure no Sandinista arms got out to the FMLN, Casey claimed.
Like many of the things the CIA said about the Contras, that explanation was a lie, a smoke screen to hide the agency's true agenda, which was to run a full- scale covert war against the Sandinistas. The Reagan administration found its Salvadoran aid program a tough sell in Congress because of the horrendous human rights abuses then occurring in the country. Frustrated by its inability to crush the FMLN guerrillas in the field despite an overwhelming firepower advantage, elements of the Salvadoran government were striking back at the rebels by murdering thousands of their supporters with death squads—right- wing, quasi-military posses that would snatch suspected rebel sympathizers off the streets and leave their mutilated bodies on the outskirts of town a few days later. At the height of this campaign, residents of the capital city of San Salvador would wake up to find forty new bodies every morning.
The Salvadoran government officially denied any connection with the death squads, but the denials rang hollow in Washington, even among Reagan's stalwarts. "Under the guise of anti-Communism, the death squads terrorized the entire country—murdering nuns, teachers, labor organizers, political opponents and thousands of other civilians," Lieutenant Colonel Oliver North wrote in his 1991 memoirs, Under Fire.
North wrote that it was clear most of the death squad activity was the responsibility of the ultraright ARENA party and its leader, former Salvadoran army major Roberto D'Aubuisson. D'Aubuisson was reportedly running one of the death squads linked to the assassination of San Salvador's Archbishop Oscar Romero—allegedly by hit men from the FDN's predecessor, the Legion of September 15.
The official whose men were committing some of the worst abuses was a $90,000-a-year CIA asset, Colonel Nicholas Carranza, head of the government's feared Treasury Police. According to one account, CIA director Casey met personally with Carranza in the summer of 1983 and told him to "knock it off," or the CIA would kick him off the payroll.
In phone conversations with Lister, Christopher Moore learned that his boss was "supposedly doing security consulting for the government of El Salvador." In June of 1982 Lister asked Moore to fly down and "babysit" a government contract for a few days while Lister returned to the United States to take care of some unspecified business.
Moore agreed, and was off on what he would call the strangest trip of his life.
Accompanying him on the eleven-day excursion, Moore said, was a man who introduced himself as the Salvadoran consul in Los Angeles. Since Moore spoke little Spanish, the man served as Moore's guide and interpreter. "They flew me down to this airbase that the French were building, and I had to take pictures of it," Moore said; it was his impression that Pyramid was bidding on a contract to provide security for the base. When he returned to El Salvador's capital, San Salvador, he settled into the downtown Ramada Inn. Then he and the Salvadoran consul attended a series of meetings with none other than Major Roberto D'Aubuisson. "That was probably the highlight of my life at that point," chuckled Moore, now an attorney in Los Angeles. "There I was, a reserve police officer who'd only been in the country for a couple days, and I was sitting in this office in downtown San Salvador across the desk from the man who ran the death squads. He had a gun lying on the top of his desk and had these filing cabinets pushed up against the windows of the office so nobody could shoot through them."
At another meeting, Moore and D'Aubuisson were joined by Ray Prendes, the newly elected head of the Salvadoran Assembly and a powerful figure in the ruling Christian Democratic party. Prendes was on friendly terms with D'Aubuisson, Moore said, and both appeared to have some role in the award of the security contract Lister was seeking.
Lister, in an interview with police, "said that Moore was a good kid who had gone down to El Salvador to take pictures of poorly planned and constructed security work at a port on the southwest tip of El Salvador."
Moore was unsure if Lister's company ever got the security contract for the airbase, but he thought not. He left Lister's employ in 1983, soon after his boss began dealing in heavy weapons. "Ron was an arms dealer and was buying these semiautomatics, the ones the bad guys use, called MAC-lOs. He also had semiautomatic Uzis, and he had gotten involved in selling something called RAW, which was a rifle-fired hand grenade. He was into a lot of things."
Moore wasn't exaggerating. Between 1983 and 1986, the FBI opened up five separate investigations of Lister, all of which dealt with allegations of trafficking in illegal weapons and high-tech devices with foreign governments. In September 1983, Lister's and Blandon's company, Pyramid International, came under FBI scrutiny for Neutrality Act violations, which allegedly involved "the sale of weapons to El Salvador and the loan of money from Saudi Arabia to the Salvadoran government. Lister was also alleged to be attempting to sell arms to several other countries." Considering the fact that the Saudi government was heavily involved in financing covert operations for the Reagan Administration during the 1980s, it is perhaps not surprising that "no further information was ever developed" by the FBI. The Justice Department offered no explanation for why that probe was abandoned.
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Re: Dark Alliance: The CIA, the Contras ..., by Gary Webb
by admin » Sat Feb 14, 2026 12:31 am
Part 2 of 2
Lister admits his company was dealing guns in El Salvador. He told Justice Department investigators that Blandon and Meneses "were the ones that opened the doors down there. . .[they] had many connections in El Salvador. . .from their dmg trafficking business." Lister sold Blandon numerous machine pistols, which Blandon told him he was sending to the Contras. "Anything that I gave him was for the purpose of the Contras," Lister insisted.
An FBI informant told Justice Department inspectors that Norwin Meneses had spoken of obtaining night vision scopes from Lister in 1982, which the drug lord planned to sell to the Salvadoran government. Meneses intended to "use the proceeds from the night scopes to aid the Contras," the informant reported, but said the deal fell through.
In October 1982, Pyramid International made a security proposal to Salvadoran defense minister General Jose Guillermo Garcia, a man linked by one human rights organization to death squad activities and the slaughter of hundreds of peasants at a village called El Mozote in December 1981.
Pyramid's proposal, which L.A. police found in a 1986 drug raid, was written in Spanish and had "Confidential" stamped all over the front of it. It was entitled "Technical Proposal for an Urgent Project to Implement an Integral Security System for the Defence Ministry and the Major General of the Armed Forces of the Republic of El Salvador." The thick report described Pyramid as a unique consulting firm "dedicated to the maintenance of freedom, independence and free enterprise." The company only served clients "with a similar political orientation."
That political orientation was spelled out in no uncertain terms: Pyramid International Security Consultants would "assist the new government in its goal to combat the tyrannical forces of the left side, promoted and assisted by the current governments of Nicaragua, Cuba and the Soviet Union."
Lister's company outlined a variety of services it would provide for the sum of $189,911: bodyguard and armed escort services for Salvadoran public officials, including the president and top political and military leaders; protecting sensitive installations from sabotage and terrorism; and installing sophisticated electronic technology, including radio sensors and explosives detectors, at key military and industrial installations. Lister later explained the document as "a proposal to the current government in El Salvador to implement programs to assist them in different types of security operations, counter-measures type operations, dealing with the types of problems they had. . .. We did a whole study down there."
But one of Lister's associates at the time, a San Diego arms manufacturer, said Pyramid's security proposal was actually just a cover for another operation, a covert one directed by the CIA. The company's real mission in El Salvador, he said, was to set up a weapons manufacturing facility to supply guns to the Contras in neighboring Honduras. In a series of interviews with investigative reporter Nick Schou of the L.A. Weekly in 1996 and 1997, arms maker Timothy LaFrance described Pyramid International as "a private vendor that the CIA used to do things [the agency] couldn't do." LaFrance, whose handiwork is so highly regarded that he has created custom-made weapons for Rambo films and episodes of Miami Vice, said he accompanied Lister to El Salvador at least twice, becoming involved as a weapons specialist and helping to set up facilities to make pistols for the Contras.
Among the series of nameless biographies attached to Pyramid's proposal to the Salvadoran government, one employee is identified a "specialist in the design and manufacture of unique weapons." Lister's former office manager, Chris Moore, confirmed that "one of his [Lister's] friends, and I can't recall the name, was an arms maker in San Diego. He had a custom gun shop down there."
LaFrance, who makes and modifies exotic automatic weapons for the military and law enforcement agencies in his San Diego manufacturing facility, was convinced Lister's consulting company had friends in high places. When he applied in Pyramid's name for a State Department permit to take high-powered weapons out of the United States, for example, LaFrance said, "It came back approved in two days. Usually it takes three months. We went down to Central America with two giant boxes full of machine guns and ammunition."
LaFrance told Schou that their cover story for the trip was that they were there "to provide security, armor-proofing for vehicles, limos and homes. My end was the weapons [and] how to make a three-car stop if you're shot at." But the real purpose, LaFrance said, was to "set up an operation in El Salvador that would allow us to get around U.S. laws and supply the Contras with guns. It's much easier to build the weapons down there and that's eventually what we did." Pyramid's security proposal discusses the company's unique ability "to design and manufacture special equipment—at the point—and in any part of the world, in the majority of cases saving their foreign clients important sums in currency."
According to LaFrance, the Pyramid team moved into a mass-transit center run by the military in downtown San Salvador. "That's where we made the weapons. You could have 50 guys working in a machine shop and nobody would know it," he said. After the finished guns were transported to a Salvadoran military airstrip in Morazon province, they were airlifted to Contra camps in Honduras. "We made almost all of our drops by helicopter, buzzing the treetops," LaFrance said.
While LaFrance's story is by its nature difficult to corroborate, some independent documentation suggests he was definitely the man to see in the early 1980s if one needed to build a weapons plant. In May 1983 LaFrance was solicited by the tiny Cabazon Indian tribe in southern California to build an arms factory on their desolate, tumbleweed-strewn Riverside County reservation. "We need the know-how from an organization engaged in the manufacturing of armaments of various types, all consisting of technology not currently found on the marketplace," the Cabazons' letter to LaFrance Specialties stated. Another letter spelled out precisely what the Cabazons were looking to build: "A 9-mm machine pistol, an assault rifle with laser sighting, a long-distance sniper rifle, a portable rocket system, a night-vision scope, and a battlefield communications system 'that cannot be detected by current technology.'"
According to the San Francisco Chronicle, the Cabazons were working on "a series of international military and security projects that seem to be lifted from the pages of a spy novel." The tribal administrator was a man who claimed to have long experience working for the CIA, helping out on the agency's Chilean destabilization program in the 1970s. He had paired the tribe up with Wackenhut International Inc., a security firm the Chronicle described as being "led by former officials of the CIA, the FBI, National Security Agency, Defense Department and federal law enforcement."
Wackenhut was very active in El Salvador during the Contra war, providing employees to protect the U.S. embassy and other installations, and doing "things you wouldn't want your mother to know about," one Wackenhut employee told Spy magazine in 1992. Apparently the firm was using the Cabazon reservation's tax-exempt status and its freedom from federal oversight to gain a competitive advantage in soliciting federal weapons projects.
Freelance investigative reporter Danny Casolaro was looking into the Cabazon/Wackenhut projects as part of a larger conspiracy investigation at the time he was found dead in a West Virginia motel room in 1991, allegedly a suicide victim. He had told friends he was convinced that "spies, arms merchants and others were using the reservation as a low-profile site on which to develop weapons for Third World armies, including the Nicaraguan Contras." The Chronicle stated that Contra leader Eden Pastora had visited a firing range near the reservation for a weapons demonstration in 1981, a claim Pastora has both confirmed and denied on separate occasions.
In early 1994 the U.S. Justice Department announced that it was opening "a nationwide investigation" into Casolaro's suspicious death—a probe ordered by then-associate attorney general Webb Hubbell. Not long afterward Hubbell pleaded guilty to crimes he'd committed while an Arkansas lawyer and resigned from the Justice Department. What resulted from the Casolaro investigation, or even whether it ever went forward, has not been made public.
Hubbell's interest in the journalist's death may have been more than passing curiousity. Hubbell had his own connections to a company that was making weapons parts for the Contras.
Tim LaFrance's story about setting up an arms factory with Ronald Lister in El Salvador bears striking similarities to one told by Terry Reed, a former air force intelligence officer and FBI informant who became involved with the CIA's Contra project in the mid-1980s. Reed, a pilot and machine tool expert, said he was initially recruited to train would-be Contra pilots at a clandestine airstrip near Nella, Arkansas. Later, he claims, he was asked to help the CIA set up secret weapons parts facilities in Arkansas and, later, in Mexico.
In his memoirs, Compromised, Reed wrote that he scouted locations and provided the corporate shell for CIA agents working with the Contras to set up and run a sophisticated machine-tool shop in Mexico in 1985-86, in order to keep a supply of untraceable weapons parts flowing to the Contras during a time when Congress had cut off the rebels' CIA assistance. He claims CIA operatives were shipping cocaine through the machine-tool company he'd helped the agency set up in Guadalajara, Mexico. One of the companies Reed worked with in Arkansas was a small manufacturer of parking meters called Park On Meter Inc., located in the town of Russellville. Reed claimed that the company was secretly manufacturing parts for M-16 rifles as a subcontractor on a CIA weapons project to supply the Contras.
The Washington Post sent a reporter to Arkansas in 1994 to "investigate" Reed's story. While the resultant article was a snide and ham-handed attempt to portray Reed as a crackpot conspiracy theorist, it nonetheless confirmed many of the basic elements of his story. "Some of the key relationships described in the book did exist in some form," the Post grudgingly admitted. "The Iver Johnson arms company near Little Rock, which the book portrays as being at the center of the gun-manufacturing effort, did ship a load of weapons to Nicaragua through a Mexican distributor, according to former plant engineer J. A. Matejko. But Matejko, described in the book as part of the CIA plan, says the rifles were M-ls, not M-16s." Moreover, the Post found, the parking meter company Reed named "did make some gun parts for Iver Johnson, another relationship characterized in the book as part of the CIA weapons scheme." But, the Post scoffed, the parts were "firing pins, not M-16 bolts as the book contends."
Park On Meter's former secretary and corporate lawyer was Webb Hubbell, who also happens to be the brother-in-law of the company's owner. Hubbell admitted to a Time magazine reporter that POM was also making rocket launchers.
Another similarity between the weapons operations described by Reed and LaFrance is that they both involved admitted drug traffickers who appeared to be working for the U.S. government. A central figure in all of Reed's dealings with the CIA, he wrote, was a CIA and DEA contract agent named Adler Berriman Seal. A former airline pilot, Seal moved in 1982 from Baton Rouge to a tiny airfield in isolated Mena, Arkansas, Intermountain Regional Airport, and began running drugs and weapons.
In the early 1980s, Barry Seal was one of the biggest cocaine and marijuana importers in the southern United States, flying loads in directly for the Medellin cartel and air-dropping them with pinpoint precision across Louisiana, Arkansas, and other southern states.
"Seal detailed his cocaine-smuggling activities in '81, '82 and '83. What he testified to was that he was involved in 50 trips during those three years," IRS spokesman Henry Holms told the Baton Rouge State Times in 1986, explaining a $29 million lien that the IRS filed against Seal for back taxes. A letter that year from Louisiana's attorney general to U.S. Attorney General Ed Meese said Seal "smuggled between $3 billion and $5 billion worth of drugs into the U.S."
Seal's farm in Baton Rouge, according to a 1983 U.S. Customs report, was allegedly used as a drop site for cocaine and marijuana flown into the country aboard a DC-4 aircraft, N90201. That same plane subsequently turned up flying supplies for the Contras in 1985 through an air cargo company the FDN hired called Hondu Carib Cargo Inc. The operator of Hondu Carib, records show, was FDN leader Adolfo Calero's brother, Mario Calero.
Hondu Carib's owner was pilot Frank Moss, identified in a 1989 Senate report as having "been investigated, although never indicted, for narcotics offenses by ten different law enforcement agencies." The report said Moss flew FDN supply missions for both Hondu Carib and a Honduran air freight company called SETCO, which was owned by Honduras's biggest drug trafficker, Juan Matta Ballesteros.
One DC-4 Moss used to ferry Contra supplies was seized by the DEA in March 1987 on a suspected drug run off Florida's coast. Aboard the plane was marijuana residue and Moss' notes which, according to a CIA cable, contained "the names of two CIA officers and their telephone numbers." Also found was the phone number of Robert Owen, Oliver North's courier in Central America. (In 1985, records show, Owen reported to Oliver North that a DC-6 owned by Mario Calero "which is being used for runs out of New Orleans is probably being used for drug runs into U.S.")
During the time he was dealing with Terry Reed, Seal was also working for the DEA as a top-level informant; in 1984 he participated in a joint CIA-DEA sting operation in an attempt to snare Sandinista government officials in drug smuggling. Congressional records show North was being regularly briefed by the CIA on Seal's sting operation, was supplied with some of the evidence it produced, and allegedly leaked the information to the press shortly before a critical vote on Contra aid was coming up in Congress. North maintains that his only involvement in the Seal sting against the Sandinistas was as an observer, but a statement he gave to the FBI in June 1986 suggests that his relationship with the trafficker was considerably more complex than that.
On February 17, 1986, Seal was murdered in New Orleans by Colombian hit men. Four months later, in June, North called the FBI and claimed that there was an "active measures program" being directed against him by the Sandinistas. People were following him, he fretted, directing death threats and smears against him. "North expressed further concern that he may be targeted for elimination by organized crime due to his alleged involvement in drug running," a Washington- based FBI agent wrote. North pointed to "the murder on Feb. 17, 1986 of a DEA agent, Steele [sic], on the date prior to Steele's testifying against the Sandinistas for drug involvement."
Seal's "personal records showed him to be a contract CIA operative both before and during his years of drug-running in Mena in the 1980s," historian Roger Morris, a former NSC staffer, wrote in a 1996 book, Partners in Power, about Bill and Hillary Clinton.
The same Senate subcommittee that looked into the Contras' connections with Hondu Carib in 1988 also poked around at Mena and concluded that "associates of Seal who operated aircraft service businesses at the Mena, Arkansas, airport were also the targets of grand jury probes into narcotics trafficking. Despite the availability of evidence sufficient for an indictment on money laundering charges, and over the strong protests of State and federal law enforcement officials, the cases were dropped. The apparent reason was that the prosecution might have revealed national security information."
Clinton's critics have charged that it was impossible for the governor of Arkansas to have been unaware of Seal's activities at Mena. Indeed, Reed and former Arkansas state troopers F. D. Brown and Farry Patterson, both of whom have been critical of Clinton, insist he knew quite a bit about it—including the fact that cocaine was involved. Patterson, a member of Governor Clinton's security detail, testified that he and other troopers were aware "that there was large quantities of drugs being flown into the Mena airport, large quantities of money, large quantities of guns, that there was an ongoing operation training foreign people in that area. That it was a CIA operation."
A mechanic at Mena airport, John Bender, swore in a deposition that he saw Clinton there three times in 1985. Ex-trooper Brown said that when he confronted Clinton about the cocaine flights Seal was involved in, Governor Clinton replied, "That's Lasater's deal," referring to his close friend and campaign contributor, Little Rock bond broker Danny Ray Lasater. In 1986 Lasater was indicted by a federal grand jury in Little Rock on drug charges, and Clinton's brother Roger, a cocaine addict, was named as an unindicted coconspirator. Lasater pleaded guilty to drug trafficking; he received a thirty- month prison sentence but served only six months in prison. Clinton pardoned him in 1990.
Clinton's supporters have maintained that Lasater was no drug dealer, simply a high-flying businessman who got a little too caught up in the fast life. But that's not the way the LBI described it in a 1988 report citing the bureau's successful battles against major drug trafficking organizations. According to the LBI's description of its investigation, Lasater was part of a huge drug ring. "In December 1986, the Little Rock, Arkansas office of the LBI concluded a four- year Organized Crime Drug Enforcement Task Lorce investigation involving the cocaine trafficking activities of a prominent Little Rock businessman who operated several banking investment firms and brokerages in Arkansas and Llorida," the LBI report stated. "The investigation revealed that this businessman was the main supplier of cocaine to the investment banking and bond community in the Little Rock area, which has the largest bond community in the United States outside of New York City. This task force investigation resulted in the conviction of this businessman and 24 codefendants to jail sentences ranging from four months to 10 years, as well as the seizure of cocaine, marijuana, an automobile, an airplane and $77,000."
Typically, investigations conducted by federal Organized Crime Drug Enforcement Task Lorce (OCDETL) units target top-level criminal organizations, not businessmen who take a few toots every now and then. Researchers familiar with the Lasater investigation say that the LBI's description of its Little Rock investigation goes far beyond anything that has ever been publicly released about the Lasater probe.
Roger Morris's book, in fact, describes an investigation that was shut down prematurely and ended only with Lasater's arrest, not that of twenty-four others. But Morris also suggested that there was much more to the case than met the eye: "Whatever the limits or extent of Lasater's cocaine trafficking or the nature of his other dealings, most believed that beyond him the larger cormption in Little Rock and elsewhere pointed unmistakably to organized crime, not to mention the vast crimes of Mena—none of which would be pursued."
Morris wrote that "in sworn testimony, a former staff member of the Arkansas State Police Intelligence Unit would describe 'a shredding party' in which she was ordered to purge the state's Mena files of nearly a thousand documents, including those referring specifically to Iran-Contra conspirator Oliver North and Seal associate Terry Reed." Reed claims that North, who was the National Security Council official overseeing the Contra project at the time, was his CIA contact for both the pilot-training program and the machine-tool company front.
A Clinton spokesman called the reports of Clinton's alleged knowledge of the Mena operations "the darkest backwater of the right wing conspiracy industry." North, who certainly knew about Barry Seal, has denied knowing anything about Terry Reed or what was going on at Mena. But something was certainly happening at that little airport, and it was far from routine. While denying that the CIA was involved in any illegal activities at Mena during the time Seal's drug-smuggling operation was based there, the CIA's Inspector General's Office confirmed in 1996 that the CIA ran a "joint training operation with another federal agency at Mena Intermountain Airport." The IG report, which has never been publicly released, reportedly claims the exercise lasted only two weeks, but conveniently omits the year this occurred. The CIA also used the Mena airport for "routine aviation related services" on CIA-owned planes, according to a declassified summary of the report.
Coincidentally, it was Seal's drug-hauling airplane, a Fairchild C-123K called The Fat Lady, that a Sandinista soldier blew out of the skies over Nicaragua in 1986 with a SAM-7 missile, breaking open the Iran-Contra scandal. The plane had been based at Mena before Seal sold it and it began flying weapons-hauling missions for Oliver North and the FDN.
Morris wrote that Seal also worked for the Pentagon's spy service, the Defense Intelligence Agency (DIA), "where coded records reportedly showed him on the payroll beginning in 1982." Tim LaFrance told L.A. journalist Nick Schou that the DIA was also involved in Ronald Lister's weapons manufacturing plant in El Salvador, and that the meetings Lister and his associates had with death squad commander D'Aubuisson "happened because the DIA wanted them to happen." Records found in Ronald Lister's house in the 1986 raid disclosed connections between Lister and "a DIA subcontractor."
Another man involved in Lister's Salvadoran weapons operation, LaFrance said, was Richard E. Wilker, a former Laguna Beach resident whom LaFrance described as an ex-CIA agent. Wilker appears as the "technical director" on Pyramid International's proposal of the security project to the Salvadoran government. The biography section of the proposal boasts that the company had "technicians with the Central Intelligence Agency in physical security for 20 years."
"I met Lister through Wilker," LaFrance said. "Wilker had heard about my stuff from the Agency. He said he had a friend who wanted to talk about a deal. I called to check and Langley said he [Wilker] was still working for the Agency. So I started doing business with Lister and Wilker." Lister was not officially a CIA employee, according to LaFrance; "He wasn't getting a paycheck from them. He may have said he did but his connection was. . .with Wilker. Very few people ever work directly for the Agency."
Former CIA officer John Vandewerker, who once employed Wilker as a salesman, said he knew Lister and Wilker were involved in some business activity in El Salvador. "It was kind of touchy. . .as far as getting out of the country and all that kind of stuff." He did not elaborate. (Coincidentally, Vandewerker's name was found in the notebooks of investigative reporter Danny Casolaro after his death, in connection with the goings-on at the Cabazon reservation.)
Pyramid was eventually tossed out of El Salvador at the urging of the U.S. Army, which took over the weapons plant that he and Pyramid had started, LaFrance said.
Lister dismisses any suggestion that he was "knowingly" working for the CIA. In an interview with police in 1996, he claimed "that if he were affiliated with an organization like the CIA, he wouldn't talk about it." He confirmed, the detectives wrote, that he had been a "security consultant and had dealings and offices down in El Salvador. Lister said he had a 'Munitions Control Permit' at that time and was involved in legal arms sales." The detectives noted that "Lister did display some knowledge of the U.S. intelligence community during our interview."
Danilo Blandon met Lister very early through the FDN's organization in Los Angeles and began an association with him that would last until the late 1980s. Lister and a partner named Bill Downing, Blandon said, "went to the meeting that we have in the Contra revolution, the meeting that we have every week and they, they offer us, they show us, you know, they show us a demonstration for the weapons, okay? They show the machine guns and the weapons. They have the, the license to sell them."
Lister never sold guns to the Contras, according to Blandon. That was true, but not entirely accurate, Norwin Meneses said during a 1996 interview: "We, in fact, did make arrangements to sell arms to the Contras, but the FDN couldn't collect sufficient funds in order to finalize the deal." Meneses, Blandon, and Lister then "traveled to Honduras, Guatemala, and El Salvador to make arrangements with local governments" for the donation of arms, Meneses said.
"Lister and Blandon then continued their mission in South America without me. . .. I know Danilo says that the weapons he got came through Ronnie Lister, but that isn't true. If I told you where we got them, governments would fall," Meneses said mysteriously. "I'm not going to do it while I'm in this place." He motioned to the walls of the Nicaraguan prison where he was interviewed and made a pistol with his thumb and forefinger, which he pointed at his head.
Meneses's own involvement in Contra gun running was confirmed in 1996 by the New York Times, which quoted an unnamed Clinton administration official as saying that Meneses had "contacts with the Contras in Honduras in 1982 or 1983 and 1984, and that he was believed then to have had some involvement in arms smuggling as well as money laundering and drugs." The Times also quoted two other unnamed government officials as saying, "Intelligence reports showed that Mr. Meneses was thought to have sent some weapons for the Contras on at least one occasion. But the size and nature of the shipment are unclear."
"There is a mention of weapons with him but not an indication whether it was a standard or large pipeline," the Times quoted "one official" as saying. The Times article provided no further details on this stunning revelation.
The Los Angeles Times, in a 1996 profile that portrayed Lister as a loudmouth who told tall tales, confirmed Meneses's statements that Lister was involved in weapons transactions with him. Quoting an unidentified "former business associate" of Lister, the paper wrote that Lister "led a sales team on a futile mission to civil war-racked [sic] El Salvador in the summer of 1982 to market surplus American arms, military equipment and used school buses to the Salvadoran military. . .. The trip was financed, the associate said, with an investment of at least $20,000 from Norwin Meneses."
The trip was a failure, according to the Times, because Lister tried to arrange the deal through an unnamed leader of an unnamed political party. Afterward Lister tried to get involved in the cocaine business with Meneses, but the drug kingpin allegedly turned him down, supposedly because Meneses regarded Lister as "a loose cannon." The story did not explain how or where Lister would have picked up enough "surplus" American arms to approach the Salvadoran military about making a weapons deal.
When defense attorneys tried in 1996 to quiz Blandon about Lister's alleged relationship with the CIA, a federal prosecutor immediately objected, and the jury was ordered out of the courtroom. During a whispered conversation with the judge, the prosecutor said that while it was true that "Lister made a claim. . .that he was an employee of the CIA," the government believed it was false, made only to "impress [his] illegal business partners," and was an attempt "to deter prosecution."
Nevertheless the prosecutor asked the judge to halt that line of inquiry because it was "muddying the waters." The judge decided that since Blandon had denied that Lister worked for the government, there was no need for any more questions like that. An internal CIA investigation in 1997 declared that Lister had no relationship with the agency.
Chris Moore, who regarded Lister's claims of CIA connections with some skepticism, said Lister told him he had a "big CIA contact" at an Orange County company.
"I can't remember his name, but Ron was always was running off to meetings with him supposedly," Moore said. "Ron said the guy was the former Deputy Director of Operations or something, real high up there. All I know is that this supposed contact of his was working at the Fluor Corporation [an international construction management company based in Orange County] because I had to call Ron out there a couple times." In an interview with the Justice Department, Blandon "recalled hearing Lister say that he was involved with the CIA and that he knew someone high up in the CIA who was getting him some licenses so he could sell weapons to Iran." Blandon said he "never believed Lister because he lied too much." Years later, however, evidence would surface suggesting that Lister's claims of having a big CIA contact weren't as wild-eyed as Blandon and Moore seemed to think.
In many ways, the relationship between Lister—the ex-cop weapons dealer— and Blandon—the MBA-toting cocaine broker—was symbiotic.
Lister when he first met Blandon, "knew nothing about narcotics and could not tell you coke from flour. I had never seen the shit." But after Lister returned from his Central American travels, his former San Diego attorney said, he appeared to be an expert in the cocaine business. "When he came back, he seemed to know a lot about what was going on in Colombia with drug trafficking. I thought it was interesting because in the mid-1980s, no one knew very much about these cartels. But he knew quite a bit. And he knew names and dates, places, et cetera.
"I can remember one incident in particular. In the papers at the time all of a sudden there were these stories about the Medellin cartel, and Ron just snorted and said, 'What the hell is with the news media? There are all these stories about the Medellin cartel and nothing about the Cali cartel.' Ron said the Cali cartel is where all the power is concentrated, that's where the power structure is, and no one is even bothering them. They're getting ready to expand their market to Europe. They're buying cargo ships and airplanes.' Well, I'd never heard of the Cali cartel at that point. Subsequent events certainly proved him right."
The attorney surmised that Lister could have gained "this information from the CIA, or through his work with them. He knew some pretty damned good details and professed to being through the area. Now, I have traveled extensively through Central America, and the only thing I can tell you is, his information about the area was true. I know he'd been there." Lister told CIA inspectors that he had been to Colombia with Blandon and observed Blandon negotiating drug deals with the Colombians.
As 1982 drew to a close, Blandon's cocaine trafficking business in Los Angeles exploded. Almost overnight, it appears, he went from receiving little one-or two-kilo packages that could be tucked inside a lunch box to getting multimillion-dollar loads that wouldn't fit on a wheelbarrow. "I'd go over to D's [Blandon's] house, take my Mercedes over there, put three U-Haul boxes which will cover about 100 keys, about 33 per box plus one you'd squeeze in, in the trunk, go over to south L.A.," Lister told police. "It was the slickest deal you've ever seen."
There were two interrelated reasons for this huge expansion of Blandon's cocaine trafficking. One is that Dr. Raul Jeri's much-ridiculed "epidemic" of cocaine smoking had finally arrived in Los Angeles. And the other was a street- smart ghetto teenager who would come to be known as Freeway Rick.
Lister admits his company was dealing guns in El Salvador. He told Justice Department investigators that Blandon and Meneses "were the ones that opened the doors down there. . .[they] had many connections in El Salvador. . .from their dmg trafficking business." Lister sold Blandon numerous machine pistols, which Blandon told him he was sending to the Contras. "Anything that I gave him was for the purpose of the Contras," Lister insisted.
An FBI informant told Justice Department inspectors that Norwin Meneses had spoken of obtaining night vision scopes from Lister in 1982, which the drug lord planned to sell to the Salvadoran government. Meneses intended to "use the proceeds from the night scopes to aid the Contras," the informant reported, but said the deal fell through.
In October 1982, Pyramid International made a security proposal to Salvadoran defense minister General Jose Guillermo Garcia, a man linked by one human rights organization to death squad activities and the slaughter of hundreds of peasants at a village called El Mozote in December 1981.
Pyramid's proposal, which L.A. police found in a 1986 drug raid, was written in Spanish and had "Confidential" stamped all over the front of it. It was entitled "Technical Proposal for an Urgent Project to Implement an Integral Security System for the Defence Ministry and the Major General of the Armed Forces of the Republic of El Salvador." The thick report described Pyramid as a unique consulting firm "dedicated to the maintenance of freedom, independence and free enterprise." The company only served clients "with a similar political orientation."
That political orientation was spelled out in no uncertain terms: Pyramid International Security Consultants would "assist the new government in its goal to combat the tyrannical forces of the left side, promoted and assisted by the current governments of Nicaragua, Cuba and the Soviet Union."
Lister's company outlined a variety of services it would provide for the sum of $189,911: bodyguard and armed escort services for Salvadoran public officials, including the president and top political and military leaders; protecting sensitive installations from sabotage and terrorism; and installing sophisticated electronic technology, including radio sensors and explosives detectors, at key military and industrial installations. Lister later explained the document as "a proposal to the current government in El Salvador to implement programs to assist them in different types of security operations, counter-measures type operations, dealing with the types of problems they had. . .. We did a whole study down there."
But one of Lister's associates at the time, a San Diego arms manufacturer, said Pyramid's security proposal was actually just a cover for another operation, a covert one directed by the CIA. The company's real mission in El Salvador, he said, was to set up a weapons manufacturing facility to supply guns to the Contras in neighboring Honduras. In a series of interviews with investigative reporter Nick Schou of the L.A. Weekly in 1996 and 1997, arms maker Timothy LaFrance described Pyramid International as "a private vendor that the CIA used to do things [the agency] couldn't do." LaFrance, whose handiwork is so highly regarded that he has created custom-made weapons for Rambo films and episodes of Miami Vice, said he accompanied Lister to El Salvador at least twice, becoming involved as a weapons specialist and helping to set up facilities to make pistols for the Contras.
Among the series of nameless biographies attached to Pyramid's proposal to the Salvadoran government, one employee is identified a "specialist in the design and manufacture of unique weapons." Lister's former office manager, Chris Moore, confirmed that "one of his [Lister's] friends, and I can't recall the name, was an arms maker in San Diego. He had a custom gun shop down there."
LaFrance, who makes and modifies exotic automatic weapons for the military and law enforcement agencies in his San Diego manufacturing facility, was convinced Lister's consulting company had friends in high places. When he applied in Pyramid's name for a State Department permit to take high-powered weapons out of the United States, for example, LaFrance said, "It came back approved in two days. Usually it takes three months. We went down to Central America with two giant boxes full of machine guns and ammunition."
LaFrance told Schou that their cover story for the trip was that they were there "to provide security, armor-proofing for vehicles, limos and homes. My end was the weapons [and] how to make a three-car stop if you're shot at." But the real purpose, LaFrance said, was to "set up an operation in El Salvador that would allow us to get around U.S. laws and supply the Contras with guns. It's much easier to build the weapons down there and that's eventually what we did." Pyramid's security proposal discusses the company's unique ability "to design and manufacture special equipment—at the point—and in any part of the world, in the majority of cases saving their foreign clients important sums in currency."
According to LaFrance, the Pyramid team moved into a mass-transit center run by the military in downtown San Salvador. "That's where we made the weapons. You could have 50 guys working in a machine shop and nobody would know it," he said. After the finished guns were transported to a Salvadoran military airstrip in Morazon province, they were airlifted to Contra camps in Honduras. "We made almost all of our drops by helicopter, buzzing the treetops," LaFrance said.
While LaFrance's story is by its nature difficult to corroborate, some independent documentation suggests he was definitely the man to see in the early 1980s if one needed to build a weapons plant. In May 1983 LaFrance was solicited by the tiny Cabazon Indian tribe in southern California to build an arms factory on their desolate, tumbleweed-strewn Riverside County reservation. "We need the know-how from an organization engaged in the manufacturing of armaments of various types, all consisting of technology not currently found on the marketplace," the Cabazons' letter to LaFrance Specialties stated. Another letter spelled out precisely what the Cabazons were looking to build: "A 9-mm machine pistol, an assault rifle with laser sighting, a long-distance sniper rifle, a portable rocket system, a night-vision scope, and a battlefield communications system 'that cannot be detected by current technology.'"
According to the San Francisco Chronicle, the Cabazons were working on "a series of international military and security projects that seem to be lifted from the pages of a spy novel." The tribal administrator was a man who claimed to have long experience working for the CIA, helping out on the agency's Chilean destabilization program in the 1970s. He had paired the tribe up with Wackenhut International Inc., a security firm the Chronicle described as being "led by former officials of the CIA, the FBI, National Security Agency, Defense Department and federal law enforcement."
Wackenhut was very active in El Salvador during the Contra war, providing employees to protect the U.S. embassy and other installations, and doing "things you wouldn't want your mother to know about," one Wackenhut employee told Spy magazine in 1992. Apparently the firm was using the Cabazon reservation's tax-exempt status and its freedom from federal oversight to gain a competitive advantage in soliciting federal weapons projects.
Freelance investigative reporter Danny Casolaro was looking into the Cabazon/Wackenhut projects as part of a larger conspiracy investigation at the time he was found dead in a West Virginia motel room in 1991, allegedly a suicide victim. He had told friends he was convinced that "spies, arms merchants and others were using the reservation as a low-profile site on which to develop weapons for Third World armies, including the Nicaraguan Contras." The Chronicle stated that Contra leader Eden Pastora had visited a firing range near the reservation for a weapons demonstration in 1981, a claim Pastora has both confirmed and denied on separate occasions.
In early 1994 the U.S. Justice Department announced that it was opening "a nationwide investigation" into Casolaro's suspicious death—a probe ordered by then-associate attorney general Webb Hubbell. Not long afterward Hubbell pleaded guilty to crimes he'd committed while an Arkansas lawyer and resigned from the Justice Department. What resulted from the Casolaro investigation, or even whether it ever went forward, has not been made public.
Hubbell's interest in the journalist's death may have been more than passing curiousity. Hubbell had his own connections to a company that was making weapons parts for the Contras.
Tim LaFrance's story about setting up an arms factory with Ronald Lister in El Salvador bears striking similarities to one told by Terry Reed, a former air force intelligence officer and FBI informant who became involved with the CIA's Contra project in the mid-1980s. Reed, a pilot and machine tool expert, said he was initially recruited to train would-be Contra pilots at a clandestine airstrip near Nella, Arkansas. Later, he claims, he was asked to help the CIA set up secret weapons parts facilities in Arkansas and, later, in Mexico.
In his memoirs, Compromised, Reed wrote that he scouted locations and provided the corporate shell for CIA agents working with the Contras to set up and run a sophisticated machine-tool shop in Mexico in 1985-86, in order to keep a supply of untraceable weapons parts flowing to the Contras during a time when Congress had cut off the rebels' CIA assistance. He claims CIA operatives were shipping cocaine through the machine-tool company he'd helped the agency set up in Guadalajara, Mexico. One of the companies Reed worked with in Arkansas was a small manufacturer of parking meters called Park On Meter Inc., located in the town of Russellville. Reed claimed that the company was secretly manufacturing parts for M-16 rifles as a subcontractor on a CIA weapons project to supply the Contras.
The Washington Post sent a reporter to Arkansas in 1994 to "investigate" Reed's story. While the resultant article was a snide and ham-handed attempt to portray Reed as a crackpot conspiracy theorist, it nonetheless confirmed many of the basic elements of his story. "Some of the key relationships described in the book did exist in some form," the Post grudgingly admitted. "The Iver Johnson arms company near Little Rock, which the book portrays as being at the center of the gun-manufacturing effort, did ship a load of weapons to Nicaragua through a Mexican distributor, according to former plant engineer J. A. Matejko. But Matejko, described in the book as part of the CIA plan, says the rifles were M-ls, not M-16s." Moreover, the Post found, the parking meter company Reed named "did make some gun parts for Iver Johnson, another relationship characterized in the book as part of the CIA weapons scheme." But, the Post scoffed, the parts were "firing pins, not M-16 bolts as the book contends."
Park On Meter's former secretary and corporate lawyer was Webb Hubbell, who also happens to be the brother-in-law of the company's owner. Hubbell admitted to a Time magazine reporter that POM was also making rocket launchers.
Another similarity between the weapons operations described by Reed and LaFrance is that they both involved admitted drug traffickers who appeared to be working for the U.S. government. A central figure in all of Reed's dealings with the CIA, he wrote, was a CIA and DEA contract agent named Adler Berriman Seal. A former airline pilot, Seal moved in 1982 from Baton Rouge to a tiny airfield in isolated Mena, Arkansas, Intermountain Regional Airport, and began running drugs and weapons.
In the early 1980s, Barry Seal was one of the biggest cocaine and marijuana importers in the southern United States, flying loads in directly for the Medellin cartel and air-dropping them with pinpoint precision across Louisiana, Arkansas, and other southern states.
"Seal detailed his cocaine-smuggling activities in '81, '82 and '83. What he testified to was that he was involved in 50 trips during those three years," IRS spokesman Henry Holms told the Baton Rouge State Times in 1986, explaining a $29 million lien that the IRS filed against Seal for back taxes. A letter that year from Louisiana's attorney general to U.S. Attorney General Ed Meese said Seal "smuggled between $3 billion and $5 billion worth of drugs into the U.S."
Seal's farm in Baton Rouge, according to a 1983 U.S. Customs report, was allegedly used as a drop site for cocaine and marijuana flown into the country aboard a DC-4 aircraft, N90201. That same plane subsequently turned up flying supplies for the Contras in 1985 through an air cargo company the FDN hired called Hondu Carib Cargo Inc. The operator of Hondu Carib, records show, was FDN leader Adolfo Calero's brother, Mario Calero.
Hondu Carib's owner was pilot Frank Moss, identified in a 1989 Senate report as having "been investigated, although never indicted, for narcotics offenses by ten different law enforcement agencies." The report said Moss flew FDN supply missions for both Hondu Carib and a Honduran air freight company called SETCO, which was owned by Honduras's biggest drug trafficker, Juan Matta Ballesteros.
One DC-4 Moss used to ferry Contra supplies was seized by the DEA in March 1987 on a suspected drug run off Florida's coast. Aboard the plane was marijuana residue and Moss' notes which, according to a CIA cable, contained "the names of two CIA officers and their telephone numbers." Also found was the phone number of Robert Owen, Oliver North's courier in Central America. (In 1985, records show, Owen reported to Oliver North that a DC-6 owned by Mario Calero "which is being used for runs out of New Orleans is probably being used for drug runs into U.S.")
During the time he was dealing with Terry Reed, Seal was also working for the DEA as a top-level informant; in 1984 he participated in a joint CIA-DEA sting operation in an attempt to snare Sandinista government officials in drug smuggling. Congressional records show North was being regularly briefed by the CIA on Seal's sting operation, was supplied with some of the evidence it produced, and allegedly leaked the information to the press shortly before a critical vote on Contra aid was coming up in Congress. North maintains that his only involvement in the Seal sting against the Sandinistas was as an observer, but a statement he gave to the FBI in June 1986 suggests that his relationship with the trafficker was considerably more complex than that.
On February 17, 1986, Seal was murdered in New Orleans by Colombian hit men. Four months later, in June, North called the FBI and claimed that there was an "active measures program" being directed against him by the Sandinistas. People were following him, he fretted, directing death threats and smears against him. "North expressed further concern that he may be targeted for elimination by organized crime due to his alleged involvement in drug running," a Washington- based FBI agent wrote. North pointed to "the murder on Feb. 17, 1986 of a DEA agent, Steele [sic], on the date prior to Steele's testifying against the Sandinistas for drug involvement."
Seal's "personal records showed him to be a contract CIA operative both before and during his years of drug-running in Mena in the 1980s," historian Roger Morris, a former NSC staffer, wrote in a 1996 book, Partners in Power, about Bill and Hillary Clinton.
The same Senate subcommittee that looked into the Contras' connections with Hondu Carib in 1988 also poked around at Mena and concluded that "associates of Seal who operated aircraft service businesses at the Mena, Arkansas, airport were also the targets of grand jury probes into narcotics trafficking. Despite the availability of evidence sufficient for an indictment on money laundering charges, and over the strong protests of State and federal law enforcement officials, the cases were dropped. The apparent reason was that the prosecution might have revealed national security information."
Clinton's critics have charged that it was impossible for the governor of Arkansas to have been unaware of Seal's activities at Mena. Indeed, Reed and former Arkansas state troopers F. D. Brown and Farry Patterson, both of whom have been critical of Clinton, insist he knew quite a bit about it—including the fact that cocaine was involved. Patterson, a member of Governor Clinton's security detail, testified that he and other troopers were aware "that there was large quantities of drugs being flown into the Mena airport, large quantities of money, large quantities of guns, that there was an ongoing operation training foreign people in that area. That it was a CIA operation."
A mechanic at Mena airport, John Bender, swore in a deposition that he saw Clinton there three times in 1985. Ex-trooper Brown said that when he confronted Clinton about the cocaine flights Seal was involved in, Governor Clinton replied, "That's Lasater's deal," referring to his close friend and campaign contributor, Little Rock bond broker Danny Ray Lasater. In 1986 Lasater was indicted by a federal grand jury in Little Rock on drug charges, and Clinton's brother Roger, a cocaine addict, was named as an unindicted coconspirator. Lasater pleaded guilty to drug trafficking; he received a thirty- month prison sentence but served only six months in prison. Clinton pardoned him in 1990.
Clinton's supporters have maintained that Lasater was no drug dealer, simply a high-flying businessman who got a little too caught up in the fast life. But that's not the way the LBI described it in a 1988 report citing the bureau's successful battles against major drug trafficking organizations. According to the LBI's description of its investigation, Lasater was part of a huge drug ring. "In December 1986, the Little Rock, Arkansas office of the LBI concluded a four- year Organized Crime Drug Enforcement Task Lorce investigation involving the cocaine trafficking activities of a prominent Little Rock businessman who operated several banking investment firms and brokerages in Arkansas and Llorida," the LBI report stated. "The investigation revealed that this businessman was the main supplier of cocaine to the investment banking and bond community in the Little Rock area, which has the largest bond community in the United States outside of New York City. This task force investigation resulted in the conviction of this businessman and 24 codefendants to jail sentences ranging from four months to 10 years, as well as the seizure of cocaine, marijuana, an automobile, an airplane and $77,000."
Typically, investigations conducted by federal Organized Crime Drug Enforcement Task Lorce (OCDETL) units target top-level criminal organizations, not businessmen who take a few toots every now and then. Researchers familiar with the Lasater investigation say that the LBI's description of its Little Rock investigation goes far beyond anything that has ever been publicly released about the Lasater probe.
Roger Morris's book, in fact, describes an investigation that was shut down prematurely and ended only with Lasater's arrest, not that of twenty-four others. But Morris also suggested that there was much more to the case than met the eye: "Whatever the limits or extent of Lasater's cocaine trafficking or the nature of his other dealings, most believed that beyond him the larger cormption in Little Rock and elsewhere pointed unmistakably to organized crime, not to mention the vast crimes of Mena—none of which would be pursued."
Morris wrote that "in sworn testimony, a former staff member of the Arkansas State Police Intelligence Unit would describe 'a shredding party' in which she was ordered to purge the state's Mena files of nearly a thousand documents, including those referring specifically to Iran-Contra conspirator Oliver North and Seal associate Terry Reed." Reed claims that North, who was the National Security Council official overseeing the Contra project at the time, was his CIA contact for both the pilot-training program and the machine-tool company front.
A Clinton spokesman called the reports of Clinton's alleged knowledge of the Mena operations "the darkest backwater of the right wing conspiracy industry." North, who certainly knew about Barry Seal, has denied knowing anything about Terry Reed or what was going on at Mena. But something was certainly happening at that little airport, and it was far from routine. While denying that the CIA was involved in any illegal activities at Mena during the time Seal's drug-smuggling operation was based there, the CIA's Inspector General's Office confirmed in 1996 that the CIA ran a "joint training operation with another federal agency at Mena Intermountain Airport." The IG report, which has never been publicly released, reportedly claims the exercise lasted only two weeks, but conveniently omits the year this occurred. The CIA also used the Mena airport for "routine aviation related services" on CIA-owned planes, according to a declassified summary of the report.
Coincidentally, it was Seal's drug-hauling airplane, a Fairchild C-123K called The Fat Lady, that a Sandinista soldier blew out of the skies over Nicaragua in 1986 with a SAM-7 missile, breaking open the Iran-Contra scandal. The plane had been based at Mena before Seal sold it and it began flying weapons-hauling missions for Oliver North and the FDN.
Morris wrote that Seal also worked for the Pentagon's spy service, the Defense Intelligence Agency (DIA), "where coded records reportedly showed him on the payroll beginning in 1982." Tim LaFrance told L.A. journalist Nick Schou that the DIA was also involved in Ronald Lister's weapons manufacturing plant in El Salvador, and that the meetings Lister and his associates had with death squad commander D'Aubuisson "happened because the DIA wanted them to happen." Records found in Ronald Lister's house in the 1986 raid disclosed connections between Lister and "a DIA subcontractor."
Another man involved in Lister's Salvadoran weapons operation, LaFrance said, was Richard E. Wilker, a former Laguna Beach resident whom LaFrance described as an ex-CIA agent. Wilker appears as the "technical director" on Pyramid International's proposal of the security project to the Salvadoran government. The biography section of the proposal boasts that the company had "technicians with the Central Intelligence Agency in physical security for 20 years."
"I met Lister through Wilker," LaFrance said. "Wilker had heard about my stuff from the Agency. He said he had a friend who wanted to talk about a deal. I called to check and Langley said he [Wilker] was still working for the Agency. So I started doing business with Lister and Wilker." Lister was not officially a CIA employee, according to LaFrance; "He wasn't getting a paycheck from them. He may have said he did but his connection was. . .with Wilker. Very few people ever work directly for the Agency."
Former CIA officer John Vandewerker, who once employed Wilker as a salesman, said he knew Lister and Wilker were involved in some business activity in El Salvador. "It was kind of touchy. . .as far as getting out of the country and all that kind of stuff." He did not elaborate. (Coincidentally, Vandewerker's name was found in the notebooks of investigative reporter Danny Casolaro after his death, in connection with the goings-on at the Cabazon reservation.)
Pyramid was eventually tossed out of El Salvador at the urging of the U.S. Army, which took over the weapons plant that he and Pyramid had started, LaFrance said.
Lister dismisses any suggestion that he was "knowingly" working for the CIA. In an interview with police in 1996, he claimed "that if he were affiliated with an organization like the CIA, he wouldn't talk about it." He confirmed, the detectives wrote, that he had been a "security consultant and had dealings and offices down in El Salvador. Lister said he had a 'Munitions Control Permit' at that time and was involved in legal arms sales." The detectives noted that "Lister did display some knowledge of the U.S. intelligence community during our interview."
Danilo Blandon met Lister very early through the FDN's organization in Los Angeles and began an association with him that would last until the late 1980s. Lister and a partner named Bill Downing, Blandon said, "went to the meeting that we have in the Contra revolution, the meeting that we have every week and they, they offer us, they show us, you know, they show us a demonstration for the weapons, okay? They show the machine guns and the weapons. They have the, the license to sell them."
Lister never sold guns to the Contras, according to Blandon. That was true, but not entirely accurate, Norwin Meneses said during a 1996 interview: "We, in fact, did make arrangements to sell arms to the Contras, but the FDN couldn't collect sufficient funds in order to finalize the deal." Meneses, Blandon, and Lister then "traveled to Honduras, Guatemala, and El Salvador to make arrangements with local governments" for the donation of arms, Meneses said.
"Lister and Blandon then continued their mission in South America without me. . .. I know Danilo says that the weapons he got came through Ronnie Lister, but that isn't true. If I told you where we got them, governments would fall," Meneses said mysteriously. "I'm not going to do it while I'm in this place." He motioned to the walls of the Nicaraguan prison where he was interviewed and made a pistol with his thumb and forefinger, which he pointed at his head.
Meneses's own involvement in Contra gun running was confirmed in 1996 by the New York Times, which quoted an unnamed Clinton administration official as saying that Meneses had "contacts with the Contras in Honduras in 1982 or 1983 and 1984, and that he was believed then to have had some involvement in arms smuggling as well as money laundering and drugs." The Times also quoted two other unnamed government officials as saying, "Intelligence reports showed that Mr. Meneses was thought to have sent some weapons for the Contras on at least one occasion. But the size and nature of the shipment are unclear."
"There is a mention of weapons with him but not an indication whether it was a standard or large pipeline," the Times quoted "one official" as saying. The Times article provided no further details on this stunning revelation.
The Los Angeles Times, in a 1996 profile that portrayed Lister as a loudmouth who told tall tales, confirmed Meneses's statements that Lister was involved in weapons transactions with him. Quoting an unidentified "former business associate" of Lister, the paper wrote that Lister "led a sales team on a futile mission to civil war-racked [sic] El Salvador in the summer of 1982 to market surplus American arms, military equipment and used school buses to the Salvadoran military. . .. The trip was financed, the associate said, with an investment of at least $20,000 from Norwin Meneses."
The trip was a failure, according to the Times, because Lister tried to arrange the deal through an unnamed leader of an unnamed political party. Afterward Lister tried to get involved in the cocaine business with Meneses, but the drug kingpin allegedly turned him down, supposedly because Meneses regarded Lister as "a loose cannon." The story did not explain how or where Lister would have picked up enough "surplus" American arms to approach the Salvadoran military about making a weapons deal.
When defense attorneys tried in 1996 to quiz Blandon about Lister's alleged relationship with the CIA, a federal prosecutor immediately objected, and the jury was ordered out of the courtroom. During a whispered conversation with the judge, the prosecutor said that while it was true that "Lister made a claim. . .that he was an employee of the CIA," the government believed it was false, made only to "impress [his] illegal business partners," and was an attempt "to deter prosecution."
Nevertheless the prosecutor asked the judge to halt that line of inquiry because it was "muddying the waters." The judge decided that since Blandon had denied that Lister worked for the government, there was no need for any more questions like that. An internal CIA investigation in 1997 declared that Lister had no relationship with the agency.
Chris Moore, who regarded Lister's claims of CIA connections with some skepticism, said Lister told him he had a "big CIA contact" at an Orange County company.
"I can't remember his name, but Ron was always was running off to meetings with him supposedly," Moore said. "Ron said the guy was the former Deputy Director of Operations or something, real high up there. All I know is that this supposed contact of his was working at the Fluor Corporation [an international construction management company based in Orange County] because I had to call Ron out there a couple times." In an interview with the Justice Department, Blandon "recalled hearing Lister say that he was involved with the CIA and that he knew someone high up in the CIA who was getting him some licenses so he could sell weapons to Iran." Blandon said he "never believed Lister because he lied too much." Years later, however, evidence would surface suggesting that Lister's claims of having a big CIA contact weren't as wild-eyed as Blandon and Moore seemed to think.
In many ways, the relationship between Lister—the ex-cop weapons dealer— and Blandon—the MBA-toting cocaine broker—was symbiotic.
Lister when he first met Blandon, "knew nothing about narcotics and could not tell you coke from flour. I had never seen the shit." But after Lister returned from his Central American travels, his former San Diego attorney said, he appeared to be an expert in the cocaine business. "When he came back, he seemed to know a lot about what was going on in Colombia with drug trafficking. I thought it was interesting because in the mid-1980s, no one knew very much about these cartels. But he knew quite a bit. And he knew names and dates, places, et cetera.
"I can remember one incident in particular. In the papers at the time all of a sudden there were these stories about the Medellin cartel, and Ron just snorted and said, 'What the hell is with the news media? There are all these stories about the Medellin cartel and nothing about the Cali cartel.' Ron said the Cali cartel is where all the power is concentrated, that's where the power structure is, and no one is even bothering them. They're getting ready to expand their market to Europe. They're buying cargo ships and airplanes.' Well, I'd never heard of the Cali cartel at that point. Subsequent events certainly proved him right."
The attorney surmised that Lister could have gained "this information from the CIA, or through his work with them. He knew some pretty damned good details and professed to being through the area. Now, I have traveled extensively through Central America, and the only thing I can tell you is, his information about the area was true. I know he'd been there." Lister told CIA inspectors that he had been to Colombia with Blandon and observed Blandon negotiating drug deals with the Colombians.
As 1982 drew to a close, Blandon's cocaine trafficking business in Los Angeles exploded. Almost overnight, it appears, he went from receiving little one-or two-kilo packages that could be tucked inside a lunch box to getting multimillion-dollar loads that wouldn't fit on a wheelbarrow. "I'd go over to D's [Blandon's] house, take my Mercedes over there, put three U-Haul boxes which will cover about 100 keys, about 33 per box plus one you'd squeeze in, in the trunk, go over to south L.A.," Lister told police. "It was the slickest deal you've ever seen."
There were two interrelated reasons for this huge expansion of Blandon's cocaine trafficking. One is that Dr. Raul Jeri's much-ridiculed "epidemic" of cocaine smoking had finally arrived in Los Angeles. And the other was a street- smart ghetto teenager who would come to be known as Freeway Rick.
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Re: Dark Alliance: The CIA, the Contras ..., by Gary Webb
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"Something happened to Ivan"
The man who would be king of the L.A. crack market saw his first rock of cocaine around Christmastime in 1979 and didn't believe it was a drug. Ricky Donnell Ross knew what drugs looked like. He was nineteen. He'd seen drugs before. But this sure didn't look like cocaine to him. It was a little whitish chunk of something that could have been bird shit, for all he knew. And you were supposed to put it in a pipe and smoke it? Right.
Ross had seen people on TV using cocaine before, and they never smoked any shit that looked like this. When they used it, they cut it up on a mirror with a razor blade and tooted it up with a hundred-dollar bill.
"It was glamorous. It was, you know, you was in the 'in' crowd if you was into cocaine, if you was using. You know, whatever. It was in," Ross said. "It was what the movie stars were doing."
Ross's skepticism seems hard to believe now, with crack dealers more plentiful than policemen in urban communities. But in 1979 it was understandable. At that point, hardly anyone had seen rock cocaine. The friend who gave Rick what he called "a fifty-dollar rock" knew about smokable cocaine only because he was traveling in the fast lane. He was on the San Jose State University football team. He went to a lot of high-class parties. He knew what was happening.
"He's like, 'Man, I'm onto something new,"' Ross would later tell the Los Angeles Times in 1994. According to the Times, "Ross ventured out and showed off his acquisition to an old pimp, who fired it right up and ordered $100 more."
The problem was, Ross didn't have any more. He didn't know how to make it or where to get it. And it's doubtful he could have found more even if he had the money, which he didn't.
If he'd searched hard enough in the right neighborhoods, maybe in Malibu or Hollywood, Ricky Ross might have been able to come up with something close —freebase cocaine. Freebase was becoming popular in the upper echelons of the drug underground in the late 1970s. It was not crack, however. Making freebase was more complicated and dangerous, requiring exotic and highly flammable solvents. It was also different in content.
Freebase resulted from mixing cocaine powder with ether. When the ether evaporated, it took the adulterants and cutting agents with it, leaving behind smokable crystals of pure cocaine base. For the process to work, however, it required a very high-quality cocaine; the cocaine powder that most people snorted wouldn't do because it was so heavily cut. Adding ether to a mishmash of mannitol, lidocaine, or milk sugar caused some "cocaine" to evaporate entirely.
Freebasing was what comedian Richard Pryor had been doing when he set himself on fire on June 9, 1980, and ran screaming from his bedroom in Northridge, outside L.A.—a ball of blazing polyester leaping across neatly kept lawns. "His polyester shirt had melted onto his arms and chest and he suffered third-degree burns from the waist up," Time magazine reported. "The Los Angeles police say Pryor told them that the accident occurred while he was 'free- basing' cocaine."
Pryor would later say freebasing was only tangentially related to his fearful scorching. The fire happened because he accidentally ignited some 151-proof rum while in a daze from a seventy-two-hour freebasing binge. If he'd been smoking freebase, in fact, he might never have burned himself at all; Pryor said he started drinking the rum because he'd run out of cocaine.
The distinction didn't matter much to the news media. The fact that Pryor—a major celebrity—had an accident while in the clutches of some weird, exotic new drug habit made it big news. "When Cocaine Can Kill," Newsweek trumpeted. "A dangerous drug craze" is how People Weekly put it. The Los Angeles Times discovered to its alarm that in the mostly black NBA, freebase use was spreading among pro basketball players.
As one cocaine expert wrote in 1982, the coverage of Pryor's accident was "reminiscent of the pre-Harrison Act yellow journalism [and] told the story of how cocaine was becoming the modern version of the Black cocaine menace of the early 1900s." The Harrison Act of 1914, which outlawed recreational cocaine use in the United States, resulted from a wild—and bogus—newspaper campaign mounted by southern sheriffs who linked coke-crazed black studs to the rapes of white women.
For a variety of reasons, including the bad press from Pryor's misfortune, freebasing was largely a passing fad, never really taking hold except among a few rich, hard-core drug users. "The relatively high cost and difficulty of producing cocaine free-base made it less accessible to most cocaine users," drug researcher Steven Belenko wrote in 1993. "An estimated 10% of cocaine users in the late 1970s also used free-base cocaine. But the need for large quantities of relatively pure cocaine and volatile chemicals to produce free-base limited its appeal to the broader group of cocaine users."
Unlike Richard Pryor's neighborhood, the neighborhood where Ricky Ross lived rarely saw cocaine in any form. As hard as the drug was to find in white, middle-class communities, it was ten times as scarce in South Central L.A., where the Ross family had lived since the early 1960s. People in the projects didn't have that kind of money, and if every once in a while they did, they sure as hell didn't go out and spend it all on white powder that barely got you high.
According to a Rand Institute study of street prices paid by DEA agents and informants, an ounce of cocaine powder in L.A. was selling for $4,844 in 1979. Other sources place it at roughly $2,500 an ounce, suggesting that DEA agents weren't the sawiest shoppers around. In any event, a tiny bit cost about half the average annual income of a South Central resident. Little wonder that marijuana and angel dust—a dangerous chemical known in the projects as "Sherm" or "water"—were the drugs of choice where Ricky Ross lived. They were far less expensive. That was why Thomas C. "Tootie" Reese, the alleged king of cocaine in black L.A. at the time, lamented that he never sold as much coke as the cops and the press claimed.
"When you mentioned drugs, whether it was heroin or coke, you heard Tootie's name," said former LAPD narcotic detective Steven Polak. "He was the kingpin, especially in the fifties and sixties. Everybody was working Tootie Reese. Tootie Reese was probably one of the first blacks who really did big dope." But the man himself had a different story for the L.A Times, which interviewed him a few months after his arrest in December 1983 for selling two kilos of cocaine to undercover officers.
"I ain't never been big," Tootie told the Times. Some evidence gathered during the investigation of Reese backed up his assertion that his cocaine¬ dealing prowess had been greatly overrated. During a taped conversation with undercover agents, Reese told them that "most of his customers purchase only five ounces or 10 ounces and that he had only five kilo-size customers." That admission was made at a time when a much bigger dealer in South Central— Danilo Blandon—was moving dozens of kilos a month through just one customer. Reese was mostly a heroin and marijuana dealer. By the early 1980s, when cocaine started seeping into the inner cities in noticeable amounts, Reese was a dinosaur.
"These new kids, once the eighties hit and these gangs hooked up with this dope, he was nothing anymore," ex-detective Polak said. "He was just an old grandpa who'd lost his teeth and wasn't worth anything anymore." A 1989 L.A. Times Magazine piece wrote him off in similar terms: "The amounts of cocaine he allegedly dealt were infinitesimal contrasted with the tonnage now sold monthly by his successors in the black community."
Reese's first major successor would be Ricky Ross, though that was not readily apparent in late 1979. Looking at him then, one would not have imagined the slender, slightly pop-eyed teenager to be a successor to anything but a hard row to hoe. A sometime thief, sometime student, he was clinging to a tattered dream of becoming a professional tennis player. Though too small for football or basketball, Ross had quick reflexes. When he was in middle school, about eleven or twelve, two family friends, Dr. Mai Bouquet and Richard Williams, encouraged him to take up tennis.
Ross's own father, Sonny, an oil tank cleaner by trade, had left home while Ross was still a small child in Tyler, Texas, in 1963. The rest of Ross's life would be spent in a sometimes tragic quest to find someone to replace him. Bouquet and Williams became Ross's first father figures. "They picked me up, took me to tennis tournaments. They took care of my racquets and tennis shoes, stuff like that," Ross said. "They fed me. You know, we'd leave a tournament, we'd go to McDonald's, something like that."
Ross said the tournaments and tennis practices kept him out of the 74 Hoover Crips, his neighborhood gang. He was friends with many of them, he said, but was never a gang member himself. Federal prison records appear to back up that claim. "There exists no information to substantiate your membership in the Los Angeles based 'Crips' street gang," stated a 1993 letter to Ross from the Federal Correctional Institution in Phoenix. "All information in your file has been deleted which reflected gang participation or membership."
"He does not have the culture of a gang member when you talk to him," said L.A Times reporter Jesse Katz, who spent months interviewing Ross in 1994 for a major series on the L.A. crack market. "He doesn't have the attitude and the—I mean, he was a capitalist."
It wasn't because Ross had anything against gangs necessarily. Most of the 74 Hoovers were homies he'd grown up with, gone to school with. He would put them to use in the future. But for now, he just didn't have time for gang-banging. "Once I started playing tennis, we'd start practicing as soon as school was out, so we'd get off the tennis court probably around 6:00 or 7:00 when it was time to go in the house."
It was hard to get away with anything there. His mother, Annie, a heavyset woman with bottle-thick glasses, a janitor in downtown office buildings, was strict. She was always checking up on him and his older brother David, snooping in their rooms to make sure they weren't getting into trouble. When she was at work, her younger sister Luetha Wilson watched the boys.
By the time Ross enrolled in Dorsey High School, his tennis skills were well honed. "I made All-League my first year. My second year, I made All-City second team and my senior year, I made All-City first team," Ross said. But he didn't fare as well in tournaments. "I'd win a few rounds. I never got ranked."
Still, Ross played well enough to retain a spot on the Dorsey High tennis team. Playing tennis for a major university was his immediate goal in life. There were about five players on his high school team that the coaches were grooming for college scholarships, and he was proud to consider himself one of them.
Ross had a bit of a problem, though. By his senior year at Dorsey, he still couldn't read or write. "My teachers just passed me, gave me C's and let me go through," Ross shrugged. It hardly seemed to matter, he said, because you didn't need it to play tennis. And in truth, it hadn't mattered. It hadn't kept him off the courts. It hadn't kept him behind in school. It only mattered when he started practicing with the Long Beach State University tennis team.
Ross had played in a tournament in Griffith Park, "and I had beat the number three or four guy from Long Beach State and a [Long Beach] coach asked me what school I was going to, when I was graduating from high school. Basically, he asked me, you know, what was I doing and how is my tennis going and stuff like that." The coach invited him over to the university for practice, and Ross worked out with the Long Beach State team a couple of times. "Then he found out about my grades and that I couldn't read or write," Ross said. To Ross's shock, that was the end of the university's interest. "I thought it basically would be the same as it had been all the time," Ross complained. "That they would just keep passing me through."
Disillusioned, he dropped out of Dorsey soon afterward, saying that it seemed pointless if he couldn't get into college. "I didn't graduate. I made it to the 12th grade and I was a few credits from being able to graduate." Ross said he was "kinda like in no man's land, almost, I would say. . .. My life was like at a standstill." On July 7, 1978, he was arrested by the LAPD for burglary and disorderly conduct. The charges would be dismissed—Ross said it was a case of mistaken identity—but the incident was an indication of the path he was on.
Ricky's other passion in life was automobiles, so he channeled his efforts in that direction. Since childhood, his mother said, "Ricky was taking things apart and putting them back together." Every summer she took the boys back to her brother's house in Overton, Texas, where Ricky and David would work on the brother's farm. Ricky began tooling around on tractors at an early age and developed driving skills quickly.
"When Ricky was about four years old he tried to drive my brother's car," Annie Ross said. "By the time he was eleven or twelve, he was driving by himself. You know, out in the country, where nobody minded. When he got older, he'd bring these cars home, work on them all the time, fix them up, and sell them. He always kept himself real busy."
In 1979, as Ross prepared to leave tennis behind, he prevailed upon someone he'd met through the sport, Mr. Fisher, a young auto upholstery teacher at the Venice Skills Center, to give him a shot at a new career. Fisher, a sometime tennis partner, got Ross into an open slot at the skills center.
"It's like a trade school where people that don't have nothing going can go and get them a trade, and they pay them," Ross said. "They pay them something really for going, you know, like help you with your expenses and stuff like that for going to the school." It was a nice favor, and Ross began attending auto repair classes. Then tennis came calling again.
Pete Brown, a coach at L.A. Trade Tech Junior College, asked Ross if he'd like to come to the technical school, learn a trade, and play tennis for him. Jubilantly, Ross quit the skills center and went running to Trade Tech. He had made a college team after all. "He was a very good player," recalled Brown. "I'd say he was probably my number-three guy on the team at the time." Ross recalled that he "played number one and number two at different times of the season. You know, like sometimes one guy would beat me and sometimes I would beat him. So we would go back and forth."
By then Ross had drifted away from his two childhood tennis mentors, Bouquet and Williams. Ross was embarrassed by his failure to get a scholarship, and he sensed that Williams wasn't eager to have him around anymore, since it was clear he wasn't going to make a major university team.
Ross began spending more time with Mr. Fisher, the upholstery teacher, and the two played tennis together frequently. Ross soon adopted Fisher as a father figure. "Me and him, we would go play, you know, what we called hitting. I would hit with him, because they like to hit with people that's better than them, and in return he would buy me tennis shoes, racquets, help me get—like if I couldn't get a racquet strung, I could call him and say that, you know, 'I need my racquet strung' and he would pay for it."
Fisher, Ross said, "was considered an uppity black guy. He was single. He stayed in the Baldwin Hills area, which is a nicer part of Los Angeles. He had a brand-new Cadillac, you know, nice jewelry, school teacher." Ross said he would "go by his house from time to time" after getting off school at Trade Tech, where the illiterate Ross, ironically, was studying bookbinding.
As the two became closer, Fisher let his guard down. In 1981, shortly before he left Trade Tech, Ross found out why Mr. Fisher was able to afford jewelry and brand-new Cadillacs on a trade school teacher's salary. "We had a conversation one day. I found out that he was dealing and also using narcotics. I'm not exactly sure how the conversation came up but we started talking about it and he started explaining to me what it was all about."
Ross said he was glad the topic arose. At this point in his life, he was looking for any way to make a buck, and it really didn't matter if it was legal or not. He'd crossed that threshold already. "Actually, when he explained it to me, I wanted to know more about it, so I started asking him more questions," Ross said. "He showed me some. It was about as big as a matchhead and he said, 'Well, this right here is worth $50 and you can sell this and it just keeps getting better and better,' is basically what he said."
Ross mulled it over. Selling cocaine certainly seemed a lot better and a lot less risky than stealing and stripping cars, which is what he'd been doing to put himself through Trade Tech. He discussed it with his running partner, Ollie Newell, known as "Big Loc" because some people thought he acted crazy. Newell, who'd just gotten out of jail and needed money, agreed that selling dope looked like a lot less work for a lot more money.
But Ross had one reservation: all the dope dealers he knew eventually got fucked up on their own product. Nothing was more pathetic than seeing a burned-out old dealer begging nickels and dimes from his former clients. That wasn't the way Ricky Ross envisioned his life ending.
"Ollie was kinda like the one that kinda like coerced me into getting into the business," Ross said. "You know, he's like, 'Come on, man, you can do it, you don't mess around with nothing, you don't smoke, you don't drink, you're clean, you can handle it.'"
Ross made up his mind. They went back to see Mr. Fisher and announced that they were ready to try it out. Ross said Fisher gave them "a fifty-dollar piece" and "we went to a neighborhood and tried to sell it."
It was not an encouraging start. "We got beat out of it," Ross said. "We gave it to somebody and they said they was going to pay us later and it didn't happen." Ross said he had to go slinking back to Fisher to tell him about the "sale," but he assured the teacher that "the guy was going to pay me the money, and he said, 'Okay, don't worry about it.'"
Chastened, Ross and Newell regrouped for another try. They scoped out the parking lot at Bret Harte Junior High, their alma mater, and stole a car from a faculty member. Selling the fancy wheels brought them $250, and a week or so after their first debacle, they went strutting back to Fisher's house with their hard-earned cash.
"We bought what's called an 8-track of cocaine from him. It's three grams of cocaine. At that time, it probably was about a gram of cocaine and about two grams of cut." Taking the 8-track for $250, they cut it again and sold it off in bits and pieces. "We could take it to our neighborhood where we stayed at and it would sell for [a total of] five, six hundred dollars. ... I think the first time we might have made about $600 off it. . .an awful lot of money."
Instead of spending the profits, Ross said, they went back to Fisher's house and ordered more cocaine. "Sold it, made more money," Ross said. "I didn't really know the game. It was like we were just stumbling through, you know what I'm saying? Picking up as we go."
Ross said the amount of cash he was able to bring in scared him.
"I was selling, and Ollie was standing back, you know, and watching me, you know, make sure didn't nobody try to rob me or nothing like that," Ross said. "So I would make like three hundred dollars, I would take it home and put it up, because I didn't want to be standing out there with a whole lot of dope and a whole lot of money. Because the police raided the spot all the time, you know. They might be raided every 15 or 20 minutes. It was a PCP street. They was selling PCP there. But they wouldn't pay no attention to me unless I had a lot of money on me."
Ross said the cops mostly just smelled dealers' hands, looking for the telltale stench of PCP. "They would just smell my hands, pat me and let me go. But if I had a wad of money, it would draw attention, so we never wanted to get over two or three hundred dollars."
Acquaintances who were dealing PCP—"slanging Sherm" or "selling water," as it was called—made fun of him for selling coke because there was a much bigger market for angel dust. "All the guys selling PCP used to tell us, 'Ya'll can make more money, ya'll should sell PCP.' And I was like, 'No, that's all right, I don't want to mess with PCP. That's too hard.' And cocaine was more, like, flyer, more like the uppity people, you know, wasn't nobody going crazy, you know? When they smoked the PCP they would go crazy and stuff and I would think, 'I ain't gonna be involved with that.' Cocaine is like, mellow, and it was cool. So I didn't mind doing it."
Still slightly unsure of the future of the cocaine business, Ross kept his hand in the auto business as well. He was still stealing cars and fencing them or stripping them down in his body shop and parting them out. On March 19, 1982, he was arrested by the LAPD for grand theft auto. The police found a Mercedes Benz in his garage with parts that didn't match. Ross dipped into his cash reserves and hired a Beverly Hills lawyer named Alan Fenster, a former prosecutor and film studio lawyer who had little trouble getting the auto theft charge tossed out of court.
"There was no evidence Ricky had any knowledge about that car," said Fenster, whose performance in that felony case would lead him to many years of lucrative employment with Ross. Fenster, who'd been defending drug dealers and drug users since the early 1970s, said it was "my recollection that when I met Rick, he was already dealing drugs. Ricky was introduced to me by another client I had, who was a dealer, and I recall that he told me Ross was someone who was into some serious dealing then."
Early 1982 was an exceptionally good time to be in the cocaine business. It was like getting in on the ground floor of Amway. "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. . ."
Though it would not become apparent for some time, the cocaine industry was then undergoing dramatic changes that would boost the fortunes of dealers everywhere. The drug was finally beginning to filter down from the penthouses into the real world, opening up a whole new audience for its seductive charms.
The most basic reason was supply and demand. In some cities, Miami in particular, supply was beginning to outstrip demand, thanks largely to the efforts of Carlos Lehder and his pals in Medellin, Colombia, who had revolutionized the import/export part of the business. By early 1982, the Medellin cartel had gotten its act together and—using special airplanes, radar avoidance techniques, and specially designed speedboats—began bringing in unheard-of amounts of cocaine, mostly through the Bahamas.
Ten days before Rick Ross's auto theft arrest in March 1982, Customs agents in Miami searched an airplane, owned by a tiny Colombian air cargo company, that had flown in from Medellin. By the time agents arrived, workers were busy unloading dozens of boxes labeled "jeans." But when an inspector stuck a screwdriver into one of them, he didn't hit denim. White powder came pouring out of the hole.
When the Customs men had finished weighing the cocaine, the scales topped out at 3,906 pounds, nearly four times the size of the previous U.S. cocaine seizure record. It was, authors Guy Gugliotta and Jeff Leen wrote in Kings of Cocaine, the DEA's "first look at the shadow of the beast."
As more loads like that got through, the wholesale price of cocaine in the U.S. began dropping. But it never dropped dramatically enough to make it popular in low-income neighborhoods. According to the 1994 Rand Institute study, between 1979 and 1982 ounce prices in L.A. fell from the stratospheric to the merely exorbitant: $4,844 vs. $4,011. Gram prices fell slightly during the same period, from $321 to $259. Kilo prices dropped more significantly, from around $75,000 to around $60,000. Major importers and top-level dealers began seeing big price breaks. But if the Rand study's figures are accurate, for the average Joe who bought by the gram, cocaine was still extremely expensive.
And that was okay with Ricky Ross and Ollie Newell. At those prices, they didn't need a lot of customers. By the end of 1981, they were finally starting to make some real money. The number of users in the neighborhoods wasn't growing that much, but they were stealing customers away from other dealers. "We just had a price," Ross said. "Nobody in the neighborhood could touch us."
The cocaine they were getting from Fisher was slightly cheaper than what others were paying, and when Ross asked him why, Fisher told him he "had a really good connection." Since Ross could charge less, it wasn't too hard to find customers willing to pay $125 a gram instead of the $150 or $200 they'd been paying. Any chance to save a buck—especially after being gouged all these years—made for very happy and loyal clients. "People would come from everywhere, man. They would come from Pomona, Pasadena, Riverside, Long Beach. It wasn't just like an L.A. thing."
Ross also exercised some of the same type of discipline that had kept him out on the tennis courts, swinging the racquet and running, hour after hour, day after day. "I mean, listen, when you got in the dope business, everybody wanted to get high. Nobody wanted to sell dope," Ross said disgustedly. "It was like. . .even Ollie! Ollie was, was, was straight and always wanted to get high, get high, get high. So. . .1 finally got in it, I said, 'Well, man, you're using up all the profit!' This was in the early stages, and he said, 'Well, I ain't gonna do no more.' But everybody else wanted to get high. [It was] the whole motto, you know, in our neighborhood—because we never left our neighborhood; we was like confined to South Central L.A.—everybody was just getting high. Let's party, man."
Ross was not the party-hearty type, not when it came to business. He considered himself first and foremost to be a professional cocaine trafficker. It was his job to move dope, and he did it with his usual intensity. "You know how some people feel that God put them down here to be a preacher? I felt that he had put me down to be the cocaine man," Ross told the L.A. Times in 1994. And like a missionary for a new religion, Ross began creating cocaine dealers.
"Eventually, all the guys that was selling PCP started seeing everybody coming [to me] with their hundred dollars, and they were selling like ten dollars worth, five dollars worth, you know, sticks. They knew every time somebody came to me, it was a hundred dollars. So I didn't have to see that many people, maybe, fifteen people a day, you know, I make fifteen hundred dollars and they started seeing to that and knowing how much money I was making.
"So then they started saying, 'Well, I'm gonna sell some water and you know I'm going to buy two hundred dollars worth from Rick and start, you know, investing it in cocaine and start doing it myself. So the next thing I know, all these guys were coming to me saying, 'Man, I want to get an eight-track.'"
But Ross's source, Mr. Fisher, was getting antsy about all the cocaine Ross and Newell were ordering. An occasional gram here and there was fine, he told Ross, but he was a schoolteacher, not Super Fly. The only reason he did a little dealing out the side was to pay for his own supply. Rick and Ollie were making a business out of it, and if they wanted to do that it was their business, but he didn't want anything to do with it.
"I think he was getting tired of us calling him up all the time and having him get us some more," Ross said. "Mr. Fisher was working so he told me to go ahead and deal directly with Ivan and we met at Mr. Fisher's house and I got the stuff."
"Ivan," a handsome, smiling Latino, had been supplying Mr. Fisher with cocaine for about a year. Ross had seen him around Fisher's house before, but they'd never been introduced.
During their first meeting, Ivan brought along another Hispanic—Henry—but Ricky wasn't clear what part Henry played, other than that he was Ivan's brother- in-law. Maybe he was his partner. Or maybe he'd just come along for the ride.
In halting English, Ivan told them that he would be happy to be their supplier from now on. If they wanted any more product, they should call him directly, instead of bothering Mr. Fisher. He slipped Ross a folded paper with a phone number on it. On the way out, Ivan told Ross that he would get them a better price than Mr. Fisher had. "We moved up fast," Ross said. "We went from moving grams to moving ounces." And Ivan proved true to his word. "After I started dealing directly with Ivan, it got better. We could take. . .the same thing we was buying from Mr. Fisher for $200 and turn it into $900, because we found out Mr. Fisher had been taking some of the money. He might have been making like $50, $75 off each one [8-track]. So we started making more money."
With more cash flow, Ross was able to order larger amounts of cocaine from Ivan and get a better price, a volume purchase break. And then he could cut his street prices even further. "He kept incrementally expanding his quantity, and every time he could do that, he was bringing the price down just a little bit more, and then what he would gain from volume, he would put right back into the operation," Times reporter Katz said. "It was just classic economics. And he saw all this in a way I guess others didn't, or weren't as disciplined as him to act on."
Some of this discipline was not entirely of Ross's choosing. One reason he and Newell began reinvesting their profits so faithfully was because they didn't dare spend the money on anything else. "My momma was strict, right? Both our mothers, me and Ollie's mother, was strict, right? So we couldn't show the money! We had like. . .we had $1,000 and we didn't even buy new tennis shoes! Because my mother woulda knew: 'Where'd you get them shoes from?'
"So we, like, hid our money. We was hiding our money from our mothers!" Ross laughed, shaking his head at the idea of two badass cocaine dealers so afraid of their mommas they couldn't spend their loot. "So even if we buy clothes, we'd hide them in the garage and put them on after we'd leave so she wouldn't find out."
But the nature of his business made it difficult to hide forever. Eventually Annie Ross figured out what was going on.
"When she found out I was selling dope, she had a fit. Threw me out of the house," Ross said. "I never rented no apartment or nothing like that. I had some money but I didn't know how to rent an apartment. I was living in her garage. I fixed it up like a little house. She was like, 'Boy, something going on. I don't know what you're doing but you ain't doing something right. You got all these people coming around here. Tell them people to stop coming round my house,"' Ross said.
He "really didn't do business there," he said, but when a customer wanted something, someone had to come by and let him know. "And she was like, 'There's too many people coming over here, I know something is wrong.' One day she just said, 'Get your stuff and leave. Don't come back over here. And Ollie, don't you come back either.' Because you know Ollie is like her godson. So she threw us out. But I had a little bit of money then and I moved in with one of my cousins and started paying her to let me stay there.
"But that's basically how we got started."
After eight months with their new supplier, just as their business really began expanding, "something happened to Ivan," Ross said. He'd disappeared. Ross and Newell panicked. Their only supplier had dropped off the face of the earth. Where were they going to get their cocaine now? From afar, Danilo Blandon watched events unfold. It was time for him to make his move.
The man who would be king of the L.A. crack market saw his first rock of cocaine around Christmastime in 1979 and didn't believe it was a drug. Ricky Donnell Ross knew what drugs looked like. He was nineteen. He'd seen drugs before. But this sure didn't look like cocaine to him. It was a little whitish chunk of something that could have been bird shit, for all he knew. And you were supposed to put it in a pipe and smoke it? Right.
Ross had seen people on TV using cocaine before, and they never smoked any shit that looked like this. When they used it, they cut it up on a mirror with a razor blade and tooted it up with a hundred-dollar bill.
"It was glamorous. It was, you know, you was in the 'in' crowd if you was into cocaine, if you was using. You know, whatever. It was in," Ross said. "It was what the movie stars were doing."
Ross's skepticism seems hard to believe now, with crack dealers more plentiful than policemen in urban communities. But in 1979 it was understandable. At that point, hardly anyone had seen rock cocaine. The friend who gave Rick what he called "a fifty-dollar rock" knew about smokable cocaine only because he was traveling in the fast lane. He was on the San Jose State University football team. He went to a lot of high-class parties. He knew what was happening.
"He's like, 'Man, I'm onto something new,"' Ross would later tell the Los Angeles Times in 1994. According to the Times, "Ross ventured out and showed off his acquisition to an old pimp, who fired it right up and ordered $100 more."
The problem was, Ross didn't have any more. He didn't know how to make it or where to get it. And it's doubtful he could have found more even if he had the money, which he didn't.
If he'd searched hard enough in the right neighborhoods, maybe in Malibu or Hollywood, Ricky Ross might have been able to come up with something close —freebase cocaine. Freebase was becoming popular in the upper echelons of the drug underground in the late 1970s. It was not crack, however. Making freebase was more complicated and dangerous, requiring exotic and highly flammable solvents. It was also different in content.
Freebase resulted from mixing cocaine powder with ether. When the ether evaporated, it took the adulterants and cutting agents with it, leaving behind smokable crystals of pure cocaine base. For the process to work, however, it required a very high-quality cocaine; the cocaine powder that most people snorted wouldn't do because it was so heavily cut. Adding ether to a mishmash of mannitol, lidocaine, or milk sugar caused some "cocaine" to evaporate entirely.
Freebasing was what comedian Richard Pryor had been doing when he set himself on fire on June 9, 1980, and ran screaming from his bedroom in Northridge, outside L.A.—a ball of blazing polyester leaping across neatly kept lawns. "His polyester shirt had melted onto his arms and chest and he suffered third-degree burns from the waist up," Time magazine reported. "The Los Angeles police say Pryor told them that the accident occurred while he was 'free- basing' cocaine."
Pryor would later say freebasing was only tangentially related to his fearful scorching. The fire happened because he accidentally ignited some 151-proof rum while in a daze from a seventy-two-hour freebasing binge. If he'd been smoking freebase, in fact, he might never have burned himself at all; Pryor said he started drinking the rum because he'd run out of cocaine.
The distinction didn't matter much to the news media. The fact that Pryor—a major celebrity—had an accident while in the clutches of some weird, exotic new drug habit made it big news. "When Cocaine Can Kill," Newsweek trumpeted. "A dangerous drug craze" is how People Weekly put it. The Los Angeles Times discovered to its alarm that in the mostly black NBA, freebase use was spreading among pro basketball players.
As one cocaine expert wrote in 1982, the coverage of Pryor's accident was "reminiscent of the pre-Harrison Act yellow journalism [and] told the story of how cocaine was becoming the modern version of the Black cocaine menace of the early 1900s." The Harrison Act of 1914, which outlawed recreational cocaine use in the United States, resulted from a wild—and bogus—newspaper campaign mounted by southern sheriffs who linked coke-crazed black studs to the rapes of white women.
For a variety of reasons, including the bad press from Pryor's misfortune, freebasing was largely a passing fad, never really taking hold except among a few rich, hard-core drug users. "The relatively high cost and difficulty of producing cocaine free-base made it less accessible to most cocaine users," drug researcher Steven Belenko wrote in 1993. "An estimated 10% of cocaine users in the late 1970s also used free-base cocaine. But the need for large quantities of relatively pure cocaine and volatile chemicals to produce free-base limited its appeal to the broader group of cocaine users."
Unlike Richard Pryor's neighborhood, the neighborhood where Ricky Ross lived rarely saw cocaine in any form. As hard as the drug was to find in white, middle-class communities, it was ten times as scarce in South Central L.A., where the Ross family had lived since the early 1960s. People in the projects didn't have that kind of money, and if every once in a while they did, they sure as hell didn't go out and spend it all on white powder that barely got you high.
According to a Rand Institute study of street prices paid by DEA agents and informants, an ounce of cocaine powder in L.A. was selling for $4,844 in 1979. Other sources place it at roughly $2,500 an ounce, suggesting that DEA agents weren't the sawiest shoppers around. In any event, a tiny bit cost about half the average annual income of a South Central resident. Little wonder that marijuana and angel dust—a dangerous chemical known in the projects as "Sherm" or "water"—were the drugs of choice where Ricky Ross lived. They were far less expensive. That was why Thomas C. "Tootie" Reese, the alleged king of cocaine in black L.A. at the time, lamented that he never sold as much coke as the cops and the press claimed.
"When you mentioned drugs, whether it was heroin or coke, you heard Tootie's name," said former LAPD narcotic detective Steven Polak. "He was the kingpin, especially in the fifties and sixties. Everybody was working Tootie Reese. Tootie Reese was probably one of the first blacks who really did big dope." But the man himself had a different story for the L.A Times, which interviewed him a few months after his arrest in December 1983 for selling two kilos of cocaine to undercover officers.
"I ain't never been big," Tootie told the Times. Some evidence gathered during the investigation of Reese backed up his assertion that his cocaine¬ dealing prowess had been greatly overrated. During a taped conversation with undercover agents, Reese told them that "most of his customers purchase only five ounces or 10 ounces and that he had only five kilo-size customers." That admission was made at a time when a much bigger dealer in South Central— Danilo Blandon—was moving dozens of kilos a month through just one customer. Reese was mostly a heroin and marijuana dealer. By the early 1980s, when cocaine started seeping into the inner cities in noticeable amounts, Reese was a dinosaur.
"These new kids, once the eighties hit and these gangs hooked up with this dope, he was nothing anymore," ex-detective Polak said. "He was just an old grandpa who'd lost his teeth and wasn't worth anything anymore." A 1989 L.A. Times Magazine piece wrote him off in similar terms: "The amounts of cocaine he allegedly dealt were infinitesimal contrasted with the tonnage now sold monthly by his successors in the black community."
Reese's first major successor would be Ricky Ross, though that was not readily apparent in late 1979. Looking at him then, one would not have imagined the slender, slightly pop-eyed teenager to be a successor to anything but a hard row to hoe. A sometime thief, sometime student, he was clinging to a tattered dream of becoming a professional tennis player. Though too small for football or basketball, Ross had quick reflexes. When he was in middle school, about eleven or twelve, two family friends, Dr. Mai Bouquet and Richard Williams, encouraged him to take up tennis.
Ross's own father, Sonny, an oil tank cleaner by trade, had left home while Ross was still a small child in Tyler, Texas, in 1963. The rest of Ross's life would be spent in a sometimes tragic quest to find someone to replace him. Bouquet and Williams became Ross's first father figures. "They picked me up, took me to tennis tournaments. They took care of my racquets and tennis shoes, stuff like that," Ross said. "They fed me. You know, we'd leave a tournament, we'd go to McDonald's, something like that."
Ross said the tournaments and tennis practices kept him out of the 74 Hoover Crips, his neighborhood gang. He was friends with many of them, he said, but was never a gang member himself. Federal prison records appear to back up that claim. "There exists no information to substantiate your membership in the Los Angeles based 'Crips' street gang," stated a 1993 letter to Ross from the Federal Correctional Institution in Phoenix. "All information in your file has been deleted which reflected gang participation or membership."
"He does not have the culture of a gang member when you talk to him," said L.A Times reporter Jesse Katz, who spent months interviewing Ross in 1994 for a major series on the L.A. crack market. "He doesn't have the attitude and the—I mean, he was a capitalist."
It wasn't because Ross had anything against gangs necessarily. Most of the 74 Hoovers were homies he'd grown up with, gone to school with. He would put them to use in the future. But for now, he just didn't have time for gang-banging. "Once I started playing tennis, we'd start practicing as soon as school was out, so we'd get off the tennis court probably around 6:00 or 7:00 when it was time to go in the house."
It was hard to get away with anything there. His mother, Annie, a heavyset woman with bottle-thick glasses, a janitor in downtown office buildings, was strict. She was always checking up on him and his older brother David, snooping in their rooms to make sure they weren't getting into trouble. When she was at work, her younger sister Luetha Wilson watched the boys.
By the time Ross enrolled in Dorsey High School, his tennis skills were well honed. "I made All-League my first year. My second year, I made All-City second team and my senior year, I made All-City first team," Ross said. But he didn't fare as well in tournaments. "I'd win a few rounds. I never got ranked."
Still, Ross played well enough to retain a spot on the Dorsey High tennis team. Playing tennis for a major university was his immediate goal in life. There were about five players on his high school team that the coaches were grooming for college scholarships, and he was proud to consider himself one of them.
Ross had a bit of a problem, though. By his senior year at Dorsey, he still couldn't read or write. "My teachers just passed me, gave me C's and let me go through," Ross shrugged. It hardly seemed to matter, he said, because you didn't need it to play tennis. And in truth, it hadn't mattered. It hadn't kept him off the courts. It hadn't kept him behind in school. It only mattered when he started practicing with the Long Beach State University tennis team.
Ross had played in a tournament in Griffith Park, "and I had beat the number three or four guy from Long Beach State and a [Long Beach] coach asked me what school I was going to, when I was graduating from high school. Basically, he asked me, you know, what was I doing and how is my tennis going and stuff like that." The coach invited him over to the university for practice, and Ross worked out with the Long Beach State team a couple of times. "Then he found out about my grades and that I couldn't read or write," Ross said. To Ross's shock, that was the end of the university's interest. "I thought it basically would be the same as it had been all the time," Ross complained. "That they would just keep passing me through."
Disillusioned, he dropped out of Dorsey soon afterward, saying that it seemed pointless if he couldn't get into college. "I didn't graduate. I made it to the 12th grade and I was a few credits from being able to graduate." Ross said he was "kinda like in no man's land, almost, I would say. . .. My life was like at a standstill." On July 7, 1978, he was arrested by the LAPD for burglary and disorderly conduct. The charges would be dismissed—Ross said it was a case of mistaken identity—but the incident was an indication of the path he was on.
Ricky's other passion in life was automobiles, so he channeled his efforts in that direction. Since childhood, his mother said, "Ricky was taking things apart and putting them back together." Every summer she took the boys back to her brother's house in Overton, Texas, where Ricky and David would work on the brother's farm. Ricky began tooling around on tractors at an early age and developed driving skills quickly.
"When Ricky was about four years old he tried to drive my brother's car," Annie Ross said. "By the time he was eleven or twelve, he was driving by himself. You know, out in the country, where nobody minded. When he got older, he'd bring these cars home, work on them all the time, fix them up, and sell them. He always kept himself real busy."
In 1979, as Ross prepared to leave tennis behind, he prevailed upon someone he'd met through the sport, Mr. Fisher, a young auto upholstery teacher at the Venice Skills Center, to give him a shot at a new career. Fisher, a sometime tennis partner, got Ross into an open slot at the skills center.
"It's like a trade school where people that don't have nothing going can go and get them a trade, and they pay them," Ross said. "They pay them something really for going, you know, like help you with your expenses and stuff like that for going to the school." It was a nice favor, and Ross began attending auto repair classes. Then tennis came calling again.
Pete Brown, a coach at L.A. Trade Tech Junior College, asked Ross if he'd like to come to the technical school, learn a trade, and play tennis for him. Jubilantly, Ross quit the skills center and went running to Trade Tech. He had made a college team after all. "He was a very good player," recalled Brown. "I'd say he was probably my number-three guy on the team at the time." Ross recalled that he "played number one and number two at different times of the season. You know, like sometimes one guy would beat me and sometimes I would beat him. So we would go back and forth."
By then Ross had drifted away from his two childhood tennis mentors, Bouquet and Williams. Ross was embarrassed by his failure to get a scholarship, and he sensed that Williams wasn't eager to have him around anymore, since it was clear he wasn't going to make a major university team.
Ross began spending more time with Mr. Fisher, the upholstery teacher, and the two played tennis together frequently. Ross soon adopted Fisher as a father figure. "Me and him, we would go play, you know, what we called hitting. I would hit with him, because they like to hit with people that's better than them, and in return he would buy me tennis shoes, racquets, help me get—like if I couldn't get a racquet strung, I could call him and say that, you know, 'I need my racquet strung' and he would pay for it."
Fisher, Ross said, "was considered an uppity black guy. He was single. He stayed in the Baldwin Hills area, which is a nicer part of Los Angeles. He had a brand-new Cadillac, you know, nice jewelry, school teacher." Ross said he would "go by his house from time to time" after getting off school at Trade Tech, where the illiterate Ross, ironically, was studying bookbinding.
As the two became closer, Fisher let his guard down. In 1981, shortly before he left Trade Tech, Ross found out why Mr. Fisher was able to afford jewelry and brand-new Cadillacs on a trade school teacher's salary. "We had a conversation one day. I found out that he was dealing and also using narcotics. I'm not exactly sure how the conversation came up but we started talking about it and he started explaining to me what it was all about."
Ross said he was glad the topic arose. At this point in his life, he was looking for any way to make a buck, and it really didn't matter if it was legal or not. He'd crossed that threshold already. "Actually, when he explained it to me, I wanted to know more about it, so I started asking him more questions," Ross said. "He showed me some. It was about as big as a matchhead and he said, 'Well, this right here is worth $50 and you can sell this and it just keeps getting better and better,' is basically what he said."
Ross mulled it over. Selling cocaine certainly seemed a lot better and a lot less risky than stealing and stripping cars, which is what he'd been doing to put himself through Trade Tech. He discussed it with his running partner, Ollie Newell, known as "Big Loc" because some people thought he acted crazy. Newell, who'd just gotten out of jail and needed money, agreed that selling dope looked like a lot less work for a lot more money.
But Ross had one reservation: all the dope dealers he knew eventually got fucked up on their own product. Nothing was more pathetic than seeing a burned-out old dealer begging nickels and dimes from his former clients. That wasn't the way Ricky Ross envisioned his life ending.
"Ollie was kinda like the one that kinda like coerced me into getting into the business," Ross said. "You know, he's like, 'Come on, man, you can do it, you don't mess around with nothing, you don't smoke, you don't drink, you're clean, you can handle it.'"
Ross made up his mind. They went back to see Mr. Fisher and announced that they were ready to try it out. Ross said Fisher gave them "a fifty-dollar piece" and "we went to a neighborhood and tried to sell it."
It was not an encouraging start. "We got beat out of it," Ross said. "We gave it to somebody and they said they was going to pay us later and it didn't happen." Ross said he had to go slinking back to Fisher to tell him about the "sale," but he assured the teacher that "the guy was going to pay me the money, and he said, 'Okay, don't worry about it.'"
Chastened, Ross and Newell regrouped for another try. They scoped out the parking lot at Bret Harte Junior High, their alma mater, and stole a car from a faculty member. Selling the fancy wheels brought them $250, and a week or so after their first debacle, they went strutting back to Fisher's house with their hard-earned cash.
"We bought what's called an 8-track of cocaine from him. It's three grams of cocaine. At that time, it probably was about a gram of cocaine and about two grams of cut." Taking the 8-track for $250, they cut it again and sold it off in bits and pieces. "We could take it to our neighborhood where we stayed at and it would sell for [a total of] five, six hundred dollars. ... I think the first time we might have made about $600 off it. . .an awful lot of money."
Instead of spending the profits, Ross said, they went back to Fisher's house and ordered more cocaine. "Sold it, made more money," Ross said. "I didn't really know the game. It was like we were just stumbling through, you know what I'm saying? Picking up as we go."
Ross said the amount of cash he was able to bring in scared him.
"I was selling, and Ollie was standing back, you know, and watching me, you know, make sure didn't nobody try to rob me or nothing like that," Ross said. "So I would make like three hundred dollars, I would take it home and put it up, because I didn't want to be standing out there with a whole lot of dope and a whole lot of money. Because the police raided the spot all the time, you know. They might be raided every 15 or 20 minutes. It was a PCP street. They was selling PCP there. But they wouldn't pay no attention to me unless I had a lot of money on me."
Ross said the cops mostly just smelled dealers' hands, looking for the telltale stench of PCP. "They would just smell my hands, pat me and let me go. But if I had a wad of money, it would draw attention, so we never wanted to get over two or three hundred dollars."
Acquaintances who were dealing PCP—"slanging Sherm" or "selling water," as it was called—made fun of him for selling coke because there was a much bigger market for angel dust. "All the guys selling PCP used to tell us, 'Ya'll can make more money, ya'll should sell PCP.' And I was like, 'No, that's all right, I don't want to mess with PCP. That's too hard.' And cocaine was more, like, flyer, more like the uppity people, you know, wasn't nobody going crazy, you know? When they smoked the PCP they would go crazy and stuff and I would think, 'I ain't gonna be involved with that.' Cocaine is like, mellow, and it was cool. So I didn't mind doing it."
Still slightly unsure of the future of the cocaine business, Ross kept his hand in the auto business as well. He was still stealing cars and fencing them or stripping them down in his body shop and parting them out. On March 19, 1982, he was arrested by the LAPD for grand theft auto. The police found a Mercedes Benz in his garage with parts that didn't match. Ross dipped into his cash reserves and hired a Beverly Hills lawyer named Alan Fenster, a former prosecutor and film studio lawyer who had little trouble getting the auto theft charge tossed out of court.
"There was no evidence Ricky had any knowledge about that car," said Fenster, whose performance in that felony case would lead him to many years of lucrative employment with Ross. Fenster, who'd been defending drug dealers and drug users since the early 1970s, said it was "my recollection that when I met Rick, he was already dealing drugs. Ricky was introduced to me by another client I had, who was a dealer, and I recall that he told me Ross was someone who was into some serious dealing then."
Early 1982 was an exceptionally good time to be in the cocaine business. It was like getting in on the ground floor of Amway. "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. . ."
Though it would not become apparent for some time, the cocaine industry was then undergoing dramatic changes that would boost the fortunes of dealers everywhere. The drug was finally beginning to filter down from the penthouses into the real world, opening up a whole new audience for its seductive charms.
The most basic reason was supply and demand. In some cities, Miami in particular, supply was beginning to outstrip demand, thanks largely to the efforts of Carlos Lehder and his pals in Medellin, Colombia, who had revolutionized the import/export part of the business. By early 1982, the Medellin cartel had gotten its act together and—using special airplanes, radar avoidance techniques, and specially designed speedboats—began bringing in unheard-of amounts of cocaine, mostly through the Bahamas.
Ten days before Rick Ross's auto theft arrest in March 1982, Customs agents in Miami searched an airplane, owned by a tiny Colombian air cargo company, that had flown in from Medellin. By the time agents arrived, workers were busy unloading dozens of boxes labeled "jeans." But when an inspector stuck a screwdriver into one of them, he didn't hit denim. White powder came pouring out of the hole.
When the Customs men had finished weighing the cocaine, the scales topped out at 3,906 pounds, nearly four times the size of the previous U.S. cocaine seizure record. It was, authors Guy Gugliotta and Jeff Leen wrote in Kings of Cocaine, the DEA's "first look at the shadow of the beast."
As more loads like that got through, the wholesale price of cocaine in the U.S. began dropping. But it never dropped dramatically enough to make it popular in low-income neighborhoods. According to the 1994 Rand Institute study, between 1979 and 1982 ounce prices in L.A. fell from the stratospheric to the merely exorbitant: $4,844 vs. $4,011. Gram prices fell slightly during the same period, from $321 to $259. Kilo prices dropped more significantly, from around $75,000 to around $60,000. Major importers and top-level dealers began seeing big price breaks. But if the Rand study's figures are accurate, for the average Joe who bought by the gram, cocaine was still extremely expensive.
And that was okay with Ricky Ross and Ollie Newell. At those prices, they didn't need a lot of customers. By the end of 1981, they were finally starting to make some real money. The number of users in the neighborhoods wasn't growing that much, but they were stealing customers away from other dealers. "We just had a price," Ross said. "Nobody in the neighborhood could touch us."
The cocaine they were getting from Fisher was slightly cheaper than what others were paying, and when Ross asked him why, Fisher told him he "had a really good connection." Since Ross could charge less, it wasn't too hard to find customers willing to pay $125 a gram instead of the $150 or $200 they'd been paying. Any chance to save a buck—especially after being gouged all these years—made for very happy and loyal clients. "People would come from everywhere, man. They would come from Pomona, Pasadena, Riverside, Long Beach. It wasn't just like an L.A. thing."
Ross also exercised some of the same type of discipline that had kept him out on the tennis courts, swinging the racquet and running, hour after hour, day after day. "I mean, listen, when you got in the dope business, everybody wanted to get high. Nobody wanted to sell dope," Ross said disgustedly. "It was like. . .even Ollie! Ollie was, was, was straight and always wanted to get high, get high, get high. So. . .1 finally got in it, I said, 'Well, man, you're using up all the profit!' This was in the early stages, and he said, 'Well, I ain't gonna do no more.' But everybody else wanted to get high. [It was] the whole motto, you know, in our neighborhood—because we never left our neighborhood; we was like confined to South Central L.A.—everybody was just getting high. Let's party, man."
Ross was not the party-hearty type, not when it came to business. He considered himself first and foremost to be a professional cocaine trafficker. It was his job to move dope, and he did it with his usual intensity. "You know how some people feel that God put them down here to be a preacher? I felt that he had put me down to be the cocaine man," Ross told the L.A. Times in 1994. And like a missionary for a new religion, Ross began creating cocaine dealers.
"Eventually, all the guys that was selling PCP started seeing everybody coming [to me] with their hundred dollars, and they were selling like ten dollars worth, five dollars worth, you know, sticks. They knew every time somebody came to me, it was a hundred dollars. So I didn't have to see that many people, maybe, fifteen people a day, you know, I make fifteen hundred dollars and they started seeing to that and knowing how much money I was making.
"So then they started saying, 'Well, I'm gonna sell some water and you know I'm going to buy two hundred dollars worth from Rick and start, you know, investing it in cocaine and start doing it myself. So the next thing I know, all these guys were coming to me saying, 'Man, I want to get an eight-track.'"
But Ross's source, Mr. Fisher, was getting antsy about all the cocaine Ross and Newell were ordering. An occasional gram here and there was fine, he told Ross, but he was a schoolteacher, not Super Fly. The only reason he did a little dealing out the side was to pay for his own supply. Rick and Ollie were making a business out of it, and if they wanted to do that it was their business, but he didn't want anything to do with it.
"I think he was getting tired of us calling him up all the time and having him get us some more," Ross said. "Mr. Fisher was working so he told me to go ahead and deal directly with Ivan and we met at Mr. Fisher's house and I got the stuff."
"Ivan," a handsome, smiling Latino, had been supplying Mr. Fisher with cocaine for about a year. Ross had seen him around Fisher's house before, but they'd never been introduced.
During their first meeting, Ivan brought along another Hispanic—Henry—but Ricky wasn't clear what part Henry played, other than that he was Ivan's brother- in-law. Maybe he was his partner. Or maybe he'd just come along for the ride.
In halting English, Ivan told them that he would be happy to be their supplier from now on. If they wanted any more product, they should call him directly, instead of bothering Mr. Fisher. He slipped Ross a folded paper with a phone number on it. On the way out, Ivan told Ross that he would get them a better price than Mr. Fisher had. "We moved up fast," Ross said. "We went from moving grams to moving ounces." And Ivan proved true to his word. "After I started dealing directly with Ivan, it got better. We could take. . .the same thing we was buying from Mr. Fisher for $200 and turn it into $900, because we found out Mr. Fisher had been taking some of the money. He might have been making like $50, $75 off each one [8-track]. So we started making more money."
With more cash flow, Ross was able to order larger amounts of cocaine from Ivan and get a better price, a volume purchase break. And then he could cut his street prices even further. "He kept incrementally expanding his quantity, and every time he could do that, he was bringing the price down just a little bit more, and then what he would gain from volume, he would put right back into the operation," Times reporter Katz said. "It was just classic economics. And he saw all this in a way I guess others didn't, or weren't as disciplined as him to act on."
Some of this discipline was not entirely of Ross's choosing. One reason he and Newell began reinvesting their profits so faithfully was because they didn't dare spend the money on anything else. "My momma was strict, right? Both our mothers, me and Ollie's mother, was strict, right? So we couldn't show the money! We had like. . .we had $1,000 and we didn't even buy new tennis shoes! Because my mother woulda knew: 'Where'd you get them shoes from?'
"So we, like, hid our money. We was hiding our money from our mothers!" Ross laughed, shaking his head at the idea of two badass cocaine dealers so afraid of their mommas they couldn't spend their loot. "So even if we buy clothes, we'd hide them in the garage and put them on after we'd leave so she wouldn't find out."
But the nature of his business made it difficult to hide forever. Eventually Annie Ross figured out what was going on.
"When she found out I was selling dope, she had a fit. Threw me out of the house," Ross said. "I never rented no apartment or nothing like that. I had some money but I didn't know how to rent an apartment. I was living in her garage. I fixed it up like a little house. She was like, 'Boy, something going on. I don't know what you're doing but you ain't doing something right. You got all these people coming around here. Tell them people to stop coming round my house,"' Ross said.
He "really didn't do business there," he said, but when a customer wanted something, someone had to come by and let him know. "And she was like, 'There's too many people coming over here, I know something is wrong.' One day she just said, 'Get your stuff and leave. Don't come back over here. And Ollie, don't you come back either.' Because you know Ollie is like her godson. So she threw us out. But I had a little bit of money then and I moved in with one of my cousins and started paying her to let me stay there.
"But that's basically how we got started."
After eight months with their new supplier, just as their business really began expanding, "something happened to Ivan," Ross said. He'd disappeared. Ross and Newell panicked. Their only supplier had dropped off the face of the earth. Where were they going to get their cocaine now? From afar, Danilo Blandon watched events unfold. It was time for him to make his move.
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"A million hits is not enough"
Ivan's whereabouts were no mystery to Danilo Blandon. He'd been observing Ivan's dealings with Ricky Ross for quite some time, seeing their sales expand, watching the venture become more and more profitable. He had to admit it; he was jealous. Despite all the work he'd been doing for Norwin Meneses personally—keeping the books, working for the Contras, helping Norwin's wife mn the restaurant and the T-shirt company—the drug kingpin was still nagging him to move more cocaine. Every couple of months Blandon would drive all the way to Meneses's house in Pacifica, a nine-hour trip, pick up another kilo or two, drive back to L.A., and then have to put up with Meneses flogging him to sell it.
Blandon had been hitting up other car salesmen he knew, helping other cocaine dealers through dry spells now and again, but he wasn't making any great strides. He estimated that he spent "about a year, year and a half, you know, with the same two, one or two keys."
But Ivan Arguellas, another Nicaraguan exile scuttling around L.A. with cocaine to sell, had found this kid in South Central, Ricky Ross, and they were really starting to move the powder. Blandon knew Ivan, who also used the name Claudio Villavicencio, because of their shared heritage and their new profession. He sold Ivan a little cocaine every once in a while. But Ivan had other sources of supply.
The Torres brothers—the two giants with the little car lot—also got into the cocaine business around this time, according to Blandon, who surmised that they were supplying Ricky Ross. "I supposed that maybe they start with Rick," Blandon said. "I know them so well, you know, they are Nicaraguan people. . .. When I saw them getting rich, getting money, so I saw that they start doing business with him."
If the Torres brothers were dealing with Ross, as Blandon claims, it is likely that they were doing so as Ivan's suppliers, because Ross said he never met the Torreses face-to-face until long after Ivan disappeared.
Blandon had no other sources. He was stuck with Norwin Meneses, who was squeezing him dry for the Contras, charging him $60,000 a kilo and taking nearly every penny he made. Norwin was holding him back, he believed. "I didn't have my own car," Blandon complained. "I have to rent cars, you know. I used to work with him [Meneses], you know, coming from San Francisco, going back, and I thought, 'Hey, what are you doing? You're not doing nothing, you know? You're not making no—no money.'"
That's why Ivan's deal with Ricky Ross looked so good to Blandon. This little kid was a mover, and he was getting bigger all the time. "I wished I could have known Ricky. . .because all the time I want to grow in the business," Blandon said. "He [Ivan] and his brother-in-law [Henry] was selling to Rick. So I wish I could [have known] him. ... I knew how much they were selling."
Blandon got his wish. Ivan Arguellas caught a bullet in the spine that crippled him from the waist down. He was hospitalized for months and forced to quit the cocaine business while he recuperated. "He got shot by his wife," Blandon said. "He's paralyzed right now." A tough break for Ivan, but it was the break Danilo Blandon had been waiting for. Ivan's customers had fallen to his brother-in-law, Henry Corrales, a drug dealing amateur. "Henry was kind of a knucklehead," Ross recalled. "He was a nice guy who just wanted to party all the time. He didn't know what he was doing."
Blandon agreed. "When he [Ivan] got in the accident, it started Henry Corrales getting in [the business]," he said. "Henry was running the business because his brother-in-law was in the hospital. And when the guy that got paralyzed get in the hospital, he lost that [cocaine] contact. And Henry didn't have any contact more than me when he took over."
In all the time he'd been hanging around Ivan, Henry apparently hadn't made any connections of his own. In a business where a man is only as good as his sources, Henry Corrales was hurting. Ivan's people expected him to deliver. And where the hell was he going to come up with the cocaine for these black gangsters downtown?
When Blandon came by to offer his sympathies and lend a hand, Henry must have seen him as a savior. "When he doesn't have any sources, [he] asked to me and that's when we began the relationship with him," Blandon said. Corrales told him Ross was "the best customer" he and Ivan had, "a big customer that they were selling five or ten [kilos] a week. . .. For me, it was a big customer."
Henry was so grateful for Blandon's help that he agreed to share his profits on every kilo he sold, fifty-fifty. "We split the commission," Blandon said, but he couldn't remember how much that was. "I was selling to Henry Corrales and Henry Corrales was selling to him [Ricky]. Henry was coming to me to pick up the stuff."
Ross denied he was receiving that much cocaine from Henry when he started his relationship with him. He and Ollie were still dealing mostly ounces at that point, he said. It was in multi-ounce lots, to be sure—they'd buy four or eight ounces a day. But he said they did not graduate to buying kilos until later. Blandon said he knew how much Ross had been buying from Ivan because the quantity he sold him determined his price.
Ross said he did not know that Danilo Blandon had adopted him as a customer. Just as he hadn't known where Ivan got his coke from, he didn't know where Henry got his. It's not that he wasn't curious. It was just a question cocaine dealers didn't ask each other.
In the cocaine business, serious dealers had good reason to cut out their wholesaler and buy directly from the source. The closer they got, the cheaper and purer the cocaine became. The more hands it passed through, the more times the product got stepped on, or cut, and the lower the profits became.
All Ricky knew was that once he started dealing with Henry, his cocaine prices fell again. Maybe Ivan's disappearance wasn't going to be such a bad deal after all, Ross decided. "After we started dealing with Henry, it got even better."
Not long afterward, Ross started noticing a slight change in the cocaine market around South Central. Some of his customers were taking the cocaine powder he was selling them and turning it into weird little rocks—just like the one he'd seen back in 1979. A couple dealers had actually starting trying to sell rocks, he noticed, but the dopers Ricky knew regarded the product suspiciously.
"At first, nobody wanted rock," Ross said. Nobody wanted to mess with cocaine that didn't look like cocaine. Secondly, the price was too low. How could anything claiming to be cocaine cost only $25? It had to be a rip-off.
But Ricky vividly recalled his Christmastime experience with the pimp a couple years back, when the man had smoked a rock and come running back waving $100. If this stuff catches on, Ross considered, it might be worth looking into. Then one of his customers asked him if he had any rock to sell, and Ross got the message.
"See, the way rock came into play, it would be like, say somebody was going to work early in the morning and they wanted some cocaine. They wanted to get high and they'd say, 'Damn, I gotta cook this shit up and I'm late for work,' and they'd ask me, 'Can you cook it up for me?"' It was a question of convenience. Ross said sure, and promptly hired someone to make it for him.
"Know what I got in chemistry in school? A 'F'!" Ross laughed. "First started out, I was paying someone to cook it. But everybody always used to make it more complicated than it was. Like the cookers never wanted you to learn how to cook it. So everybody kind of kept it like hush-hush. 'Oh man, you got to let me do it. You goin' to mess it up.'"
In truth, rock cocaine is easy to make. Put cocaine powder in a pan, add some water and baking soda, and heat until it starts crackling. Done.
The recipe had been floating around a little while before it caught hold in South Central. In November 1979, Tennyson Guyer's Select Committee investigating cocaine provided the first public airing of the ingredients needed to turn powder into crack. "A saucer, a glass, a paper towel and Arm & Hammer baking soda are about all that is needed," testified Dr. Franklin Sher of Walnut Creek, California, a Bay Area physician whose family owned the country's largest freebase paraphernalia company at the time.
In 1981 an author named T. Davidson published a pamphlet, The Natural Process: Base-ic Instructions and Baking Soda Recipe, out of Tustin, California, an Orange County town about thirty miles east of L.A., which contained step-by- step instructions on how to make crack. Davidson hailed the simple procedure as "safe, healthy and economical."
Ross said he watched his cooker for a while and thought, "'What the hell, I'm going to try it.' Because the first person that ever tried it was me. Ollie didn't try it first. I tried it first. Then I told Ollie, 'You can do that shit too.' So we started cooking it ourselves and we started selling what we called 'ready rock.'" He crumbled the rock up and delivered it in $20 hits—nuggets about the size of a ball bearing—first in tiny bits of aluminum foil, then later in tiny glass vials.
Ross smoked some himself and found the craving for more so powerful that he vowed to stay as far away from the shit as possible.
But, man, what a product.
He saw how his customers reacted. Once they tried it, they never wanted anything else. "I think what made us start smoking was curiosity and frustration. I know that it wasn't the Black brothers' or sisters' intention to smoke cocaine as a career. It's just so addicting. It's like one hit is one too many and a million hits is not enough," explained Big Shiphead, a Shotgun Crip since he was twelve years old. "In my opinion, it's the worst drug that ever hit the face of this earth."
What happened next was just what the scientists had been predicting since 1974. As base had done in Lima and La Paz eight years earlier, rock caused a sensation in South Central. But it was an underground sensation initially.
A 1985 study by two University of Southern California social scientists provides some of the only existing documentation of crack's progression in South Central in the early 1980s, when Ross and others began selling it. It is like reading the origins of the Black Death.
"We ... reviewed the LAPD South Bureau Narcotic Division activity reports from January of 1982 to the present [April 1985]," sociologists Malcolm Klein and Cheryl Maxson wrote. "From January to April of 1982 there are notes of cocaine increase with freebase as the most popular method. In May there is a random comment about 'rock hard' pre-free-based cocaine. With continuing increases in arrests, the first real mention of rocks came in September 1982 in the Southeast division. It showed up in 77th Division after another five months. Thereafter, monthly reports continued to report the presence of rock cocaine throughout the Bureau in increasing amounts."
And that was only what the LAPD was finding when they busted somebody stupid, according to Ross; "They mighta got some dude with a few rocks in his pocket, but the LAPD didn't know nothing about what was really goin' on. The LAPD didn't mess with us at all."
Former LAPD narcotics detective Steve Polak, who was riding the streets of South Central at that time, said Ross's viewpoint was essentially correct. Street cops like him, Polak insisted, saw what was happening. As the USC study showed, many of them were putting it in their reports. But none of them really knew what they were looking at, and the brass didn't seem that interested in finding out. "We didn't know what it was. I was there as a cop in uniform. I was stopping people on the streets and seeing these rocks. I'd see them throwing these rocks, these little things, and I'd go, 'What the fuck is this?' I didn't know what the fuck it was, you know?"
When Polak asked, he was told they were bleached peanuts. "I'd put the handcuffs on them and I'd say, 'You know this is dope. I carry bleached peanuts all the time in my pocket and throw them away when I see the cops, so, you know, come on, give me a break.' It's just a matter of sending it to the lab and seeing exactly what he had and, you know, it was coming back this coke stuff."
Polak started seeing other strange items as well. "We were stopping these people and they had these little bottles of Puerto Rican rum and little glass pipes and what we called a torch, a torn-off piece of a coat hanger with a cotton swab wrapped around it. What they were doing was dipping the swab in the rum because of its high alcohol content and then they'd put the rock on top of the glass pipe and then they'd flame [the swab] up. But then again, you learn, you know? There's nothing written on this shit."
Once word got out that the Five-0 was wise and was starting to bust people with rocks on them, Polak said, "We'd drive by and see them put their hands in their mouths. And we'd come back an hour later and they'd either be overdosed or wired like a motherfucker, jumping all around like little tops. They'd put it in their mouths and they'd leave it in so long it would start to dissolve, like an aspirin. These guys were falling all over."
Smarter users found crack to be an ideal drug for the streets of South Central, where the cops tend to frisk young black men just for looking at them funny. Now you could actually carry dope with you in public, and the cops couldn't get there fast enough. "It's easy to get rid of in a pinch. Drop it on the ground and it's almost impossible to find," complained a Miami narcotics detective in 1986. "Step on it and the damned thing is history. All of a sudden your evidence ceases to exist."
The inner city of Miami started seeing crack about a year after the Los Angeles market started, but on a much smaller scale. Longtime Miami area drug researcher James Inciardi, a criminology professor, wrote in 1988 that "although crack in one form or another appeared in Miami as early as 1982, at first it was generally limited to the Caribbean and Haitian communities." The drug "advanced to the wider drug subcultures in 1984," Inciardi wrote. "By early 1985, crack had become widely available in every inner-city neighborhood in the greater Miami area."
According to several sources, 1985 was the year Jamaican posses took over the nascent crack market in inner-city Miami and began organizing and expanding it. Though the Miami market trailed the L.A. market by about a year or two, the similarities between them are striking in some respects. Both markets exploded following political upheavals in foreign countries—upheavals in which the CIA played an active role.
Just as the South Central crack market began flourishing when political exiles from Nicaragua arrived to raise money for themselves and their political causes, the Miami crack market didn't really take off until political exiles from Jamaica moved in. The intelligence division of the Drug Enforcement Administration, in a 1994 report on crack cocaine, offered a startling explanation for the evolution of the Jamaican posses from small-time dopers to "one of the most effective trafficking groups" in the United States, rivaled only by the Crips and Bloods of Los Angeles.
Since the 1970s Jamaica had been run by a socialist government headed by Michael Manley, a graduate of the London School of Economics, who immediately angered U.S. officials by recognizing the Cuban government of Fidel Castro and supporting socialist rebels that a CIA proxy army was battling in Angola. In 1977 two investigative reporters exposed a "destabilization program" against Manley's government reportedly being run by the CIA's Jamaican station chief, Norman Descoteaux. The campaign included covert shipments of arms to Manley's opponents, the use of selective violence, bombings, and assassinations, covert financial aid to the conservative Jamaica Labour party, the fomenting of extensive labor unrest, and bribery.
One of the CIA agents who would later play a key role in the Contra project, Luis Posada Carriles—a Cuban Bay of Pigs veteran with a history of engaging in arms-for-drugs deals—was sighted in Jamaica near the scene of at least one bombing, the reporters wrote.
During the course of a bitter election campaign in 1980 between Manley and a candidate from the CIA-backed Jamaican Labour party, rival political gangs killed "more than 700 people," according to the DEA. Manley lost the election. What happened next was in many ways a carbon copy of what had happened in Nicaragua and Los Angeles a year earlier, despite the fact that here the political changing of the guard was roughly the reverse of the Nicaraguan situation. "Following the election, many of these political gunmen left or were driven out of Jamaica and immigrated to the United States. They settled into the large Jamaican and Caribbean communities in Miami and New York City," the DEA intelligence report stated. "In the early 1980s, the U.S. posse leaders maintained a sense of allegiance to their political parties in Jamaica, sending weapons and dmg profits back home." Eventually, the DEA said, the Jamaican traffickers in the United States "evolved from small-time marijuana sellers into nationwide cocaine and crack distributors."
The political leanings of Miami's and South Central's major cocaine suppliers were not known to lower-level dealers and hustlers, who probably wouldn't have cared anyway. Dope was dope. Politics was polities. And it wasn't until one got to the very top of the cocaine business that the two worlds intersected.
Ricky Ross had no political interests at all, and never would. His worldview was limited to South Central, and how much cocaine he could move into it. What his Nicaraguan suppliers were doing with their money was their business, he figured.
What he was concerned with in late 1982 was that the new crack market in South Central wasn't turning into the money-maker he'd been expecting. Dealers had gotten away with charging more for powder, he said, because it sold in more expensive doses. When you were talking to someone about $300 for a gram or $3,000 for an ounce, you could pack a little more profit in around the edges, and nobody would say anything. "We was making more money when it was powder," he groused. "[The market] went to powder and rock, and eventually just went straight to rock because everybody had stopped snorting. I had to get out on the street myself and sell $20 rocks, run at the cars."
The reason crack became so popular in South Central and elsewhere was that it only cost a few bucks to become a customer. Crack normally sold in $25 hits, but you could find tiny rocks for as little as $5. "One of the principles of modern marketing is to develop products for increasingly small market segments at prices each segment can afford. Crack pushers accomplished this by creating prepackaged units at more-or-less standard sizes and prices," drug experts David Allen and James Jekel wrote in 1991.
Yale cocaine expert Dr. Robert Byck agreed that crack was a triumph of modern marketing principles. But there were more reasons than packaging for why it took off so quickly, he said. "I think the crack phenomenon is not just a matter of smoking freebase. What happened with crack was a change in the selling, distribution, and price. It was sold in a very convenient form, which was accessible to a wide range of people. Smoking, unfortunately, in our society is not an abnormal behavior. Injecting something intravenously is. Snorting something into your nose is abnormal.
"So here was a way of taking a drug that was completely within the range of so-called normal behavior. And. . .gave you the same kick that you got from shooting it intravenously, but this was free of the risk of AIDS. It was socially acceptable and, on top of that, the drug was sold in a very convenient unit package. This was to drugs like McDonald's was to hamburgers. They knew how to sell it. And I think that what happened to crack was, they knew how to sell it."
Crack's second big advantage over powder was that it democratized cocaine not only for users but for dealers as well. It didn't take a large investment anymore to call yourself a player. You could buy half a gram of powder for $150, rock it up, and get ten to twelve doses of crack, each of which would give the buyer a bigger blast than ten times as much powder. And you doubled your money.
"Crack increases its own on-the-street sales force because many addicts find they must become pushers in order to make enough money to sustain their own habits," Allen and Jekel wrote. "And they can get cocaine powder at 'wholesale' prices this way and make their own crack."
For Ross, that was the biggest problem with crack. Now he had to worry about competition from customers as well as other dealers. Competition meant fewer customers, and that meant less volume, negating the very advantage of selling crack in the first place. At the same time, his costs were going up; crack cost more to make. When he sold powder, all he needed was a scale and a bag of lactose. Now he needed a place to cook the shit up, because he couldn't do it in his cousin's apartment. He had to rent an apartment and pay rent bills and power bills. And then he needed vials, and people to help put the crack in the vials. To get the necessary volume, they had to pay people to go out and sell it, because he and Ollie couldn't do it all by themselves now. Overall, it was a bigger headache, with lower profits.
Since standardization had eliminated Ross's strategy of cutting street prices and boosting volume, he had to figure out another way to raise his profits. Fortunately, Danilo Blandon was a stickler for quality, and Henry's cocaine was of a very high purity. By experimenting, he found that he could dilute the cocaine even further, before he mixed it with the baking soda, and his customers couldn't tell the difference. Because the dope was being cooked and smoked, purity and appearance didn't matter as much as it once had.
"We called it 'blowup' and what we would do is cut it with procaine," Ross said. "You could get more weight and it would look bigger." Ross settled on a three-to-one cut, which turned one ounce of powder into four ounces. "You could turn it into as many as you wanted but the more you cut it, the less it was acceptable. . .one batch we cooked up we couldn't sell it. Customers wouldn't take it no more."
Now he had four times as much crack to sell for roughly the same cost. But a couple months later, other dealers began using blowup too. That's when he decided to get out of street-corner crack sales and get into wholesaling, selling to other crack dealers.
There was a new thing happening in parts of South Central and the San Fernando Valley suburb of Pacoima: rock houses, which some dealers had set up as one-stop shopping centers for crack. You made your crack in the kitchen, sold it in the dining room, and the customer smoked it in the living room. When they were out, the cycle began again. Since crackheads smoked hit after hit after hit until they ran out of money, it made more sense to get them in the house and keep them there, rather than go to a park or stand on the street drawing a crowd by making repeat sales all day long. Some of the more enterprising rock house operators had "strawberries" back in the bedroom if that's what you wanted, crack whores who would suck a dick for a suck on the pipe.
James Inciardi had been a drug researcher in Miami for years and considered himself to be a hardened and streetwise observer. But nothing, he wrote, prepared him for the nightmarish world of a crack house. "I observed what appeared to be the forcible gang-rape of an unconscious child. Emaciated, seemingly comatose, and likely no more than 14 years of age, she was lying spread-eagled on a filthy mattress while four men in succession had vaginal intercourse with her," Inciardi wrote. "After they had finished and left the room, another man came in and they engaged in oral sex." Inciardi discovered that she was a "house girl," who got food, clothing, a roof over her head, and all the crack she wanted if she put it out for the customers.
That was where he could still use his high-volume, low-price strategy, Ross decided. Those new rock houses and those baby brand-new dealers out there— those hustlers buying half-grams and "slanging" on the corners—they would be his customers. Ricky would sell his "ready rock" in batches, cheaper than they could make it themselves, prepackaged and ready to peddle. And the other dealers could have the street trade and the competition and cops that went along with it.
The move, which Ross places near the end of 1982, worked. It reduced his operation's costs and took him off the streets. It reduced his customers' costs as well. He moved once again into an arena with no competition, where he was free to set his own prices, cherry-pick the best customers, and undercut anyone who tried to move in on him.
"We was like. . .the first quantity dealers," Ross said. "Because there wasn't nobody really dealing quantity in L.A. at that time." Others agreed. "Ricky, as far as I'm concerned, I mean, there had to have been someone before him to hand him a rock, but he had to be one of the very first people, if not the first guy, to really sense the economic potential of street-level marketing," L.A. Times reporter Jesse Katz said in 1995. "In my story I called him the first crack millionaire to rise from the streets of South Central." Katz's 1994 profile, headlined "Deposed King of Crack," said of Ross, "He didn't make the drug and he didn't smuggle it across the border, but Ricky Donnell Ross did more than anyone else to democratize it, boosting volume, slashing prices and spreading disease on a scale never before conceived."
Ross told CIA inspectors that he was South Central's biggest cocaine dealer by the end of 1982. "I knew this because it was my business strategy to know my competitors and stay on good terms with them," Ross told the agents.
James Galipeau, a longtime probation officer in the South Central area, said Ross was indeed a pioneer. "The thing about Rick that set him apart from the other guys who started out selling when he did, guys like Honcho Day and Michael Harris, is that pretty soon, they ended up buying from him. And they were learning from him."
But it seemed that as soon as Ricky got one problem solved, another one would crop up. Now Henry was freaking out on him. Henry had never been all that reliable to begin with, Ross said, but he was getting worse all the time. He wasn't showing up when he said he would. Sometimes at night he didn't want to come down to the 'hood. And he was looking real nervous when he came. Rick didn't like it. Henry was still his only supplier. If he took a hike like Ivan did, Rick would have to find another quantity dealer with Henry's prices. Fat chance of that.
As it turned out, something was going on with Henry. He didn't have the stomach for the business. And the more cocaine he sold to Ricky Ross, the more fretful he became. By late 1982 or early 1983, Ross said, Henry had gone from selling him ounces to selling him kilograms. And Blandon said he was selling many, many kilos to Ross through Henry.
"How many kilos a week?" Blandon was asked.
"To Henry?"
"To Henry, to Ricky."
"To Henry could be 10 or 15," Blandon said.
"Ten to fifteen?"
"Yes."
"Would 50 a month be a fair estimate?"
"In 1983, it ... through Henry, yes."
That means Ricky Ross—within a year of crack's first real appearance in South Central L.A.—was selling between 1,000,000 and 1,250,000 doses of crack every single month (using DEA estimates of 20-25 rocks of crack per gram of powder, 20,000 to 25,000 per kilogram).
During 1982 and 1983, Blandon said, he and Meneses brought "three or four" planeloads of cocaine from Miami to Los Angeles. According to the Torres brothers, each one of those loads from Miami ranged between 200 and 400 kilos. These "regular" flights continued until at least 1984, they said. (Whether all of that was sold to Ross, or was divided among other customers of Meneses and Blandon, is not clear.)
Blandon said Henry's cocaine deals with Ross began frightening the novice dealer. "He was selling him so often he was getting so paranoid, you know?" Blandon said. "Somebody from his organization was in jail. . .. He told me, 'I've got $200,000, $300,000, I'm going to leave.'"
Corrales, Blandon said, planned to retire to the relative safety of Honduras. "He feel that he got a lot of money and he told me, 'Let me introduce you to my guy because my brother-in-law is still in the hospital.'" Blandon explained that Ivan Arguellas was still considered "the owner of Ricky Ross" by Henry, but since Ivan was laid up, and Henry was leaving town, Henry wondered if Blandon would mind dealing with Ricky.
Henry was not turning over his best customer for free, though. Blandon would have to continue splitting commissions with him. "He wanted to leave to Honduras, be there and get some commission," Blandon said. "He wanted that I give some commission to him, you know? That was the proposal." Blandon agreed, and Henry took him down to South Central to meet the rising young crack magnate.
"He introduced me, right in front of the house of Mary," Blandon said, referring to Mary Monroe, a friend and employee of Ross. "It was in South L.A.. . .. that was the house that later came to be the warehouse for money, and to deliver."
Ross recalled the meeting well. "We had a place, one of the ladies in our neighborhood, we used to hang out in her back yard and play pool, mess with her daughters. Danilo met us in the front yard. Henry came in the back and knocked on the door and said he wanted to talk to me. He said, 'Come on. Let's go for a ride.' So we got in the car and we were riding around and he said, 'I'm leaving and I'm going to turn you over to the man. He's gonna do a better business than what we been doing and you gonna have a better price. Everything is gonna be better for you."
The price he paid for his cocaine fell once again. "After we started talking directly with Danilo, I mean the price was just. . .everybody was saying it was the bottom. That's what they used to say. 'You've got the cheapest price in town.' Everybody else was paying like $3,000 for an ounce of cocaine and when me and Ollie started dealing directly with Danilo, I think we was getting it for like $1,800 an ounce."
After his trip to South Central, Blandon knew why Henry was nervous. It was "a rough area" of town, he said, and the place fairly bristled with firearms. For his first drug delivery, "We went to an apartment that was on the second floor and there was a door, an iron door. And there was a guy, you know, with a shotgun: 'Who are you?' We identify ourselves, then you have to pass another guy with another machine gun, or shotgun. And inside, near the dinner table in the living room, there were about five guys, and all the guys were there with a gun at the table."
When asked to date that encounter, Blandon was unclear. "1982," he said under oath. "Excuse me. Sorry. 1983. 1983, I think so really. 1983. Excuse me, I make a mistake. 1984, because I was living in Northridge. Yes, 1984." Ross said he was introduced to Blandon about six or seven months after he started dealing with Henry, which would put his first face-to-face meeting with Blandon some time in the fall of 1982 or early 1983.
Henry's retirement also seemed to improve the quality of the cocaine Ross was getting. When he took it to the dealers who were his customers, they raved about it. "They said that the stuff was not cut. It was pure." Ross had finally reached the source, the wellspring from which pure, uncut cocaine flowed in abundance. His street-dealing days were over. Now, he was the man to see.
And true to form, he began to innovate. If there was a neighborhood where the dealers were not pushing his supply, Ross said, he would find the hood's top dealer and pay him a friendly visit, bringing with him a couple kilos of Danilo's finest, which he would give the rival dealer free as a measure of his respect. Try it out and see what you think, he would tell them. And then Ross would tell them the price, and he would have another customer.
Other times, he would invite dealers to smoke parties, where all the crack they wanted would be available on the house. There was plenty more where that came from, they would be told. And the price. . .
Ross said his first deal with Blandon was for "around eight ounces." Blandon, however, said it was much more than that, at least a kilo, and that their business grew geometrically from there. "In those times, there were one, two, three, four, five, six, maybe seven a day," he said. "Every day."
At seven kilos a day, Ross was moving more than 200 kilos of cocaine every single month. That meant he was pumping out around 165,000 vials of crack a day—5 million rocks a month.
"There is no doubt that Ricky Ross created a massive distribution network that poured enormous amounts of crack into Los Angeles, and elsewhere, during the mid-1980s," the Justice Department's Inspector General concluded in 1998, calling it a "huge drug empire."
"I had as many as five cookhouses. Because that was our hardest thing, to cook. Once you cooked it, it was sold," Ross said. Compton crack dealer Leroy "Chico" Brown told of visiting one of Ross's "cook-houses," and his description matched the one Ross gave. A house in a cheap neighborhood would be purchased by a front man and gutted. The windows would be barred and steel doors installed. Large, restaurant-size gas ranges and big aluminum pots would be brought in at night and set up. And then the cookers went to work. They would work in shifts, arriving and departing as if they lived in the house. The only visitors would be the couriers, one to drop off the powder and the other to pick up the crack.
"They were stirring these big pots with those things you use in canoes," Brown said with wonder. "You know, oars."
"Working around the clock, taking the age-old axioms of good business to ominous extremes, [Ross] transformed a curbside operation at 87th and Figueroa into the Wal-Mart of cocaine," the L.A. Times wrote in 1994.
South Central L.A. had become a boomtown of sorts. What happened there was reminiscent of what occurred in the hills and hollows of Kentucky during the coal boom of the 1970s, when seemingly worthless land was suddenly worth millions. While most of the residents remained poor and poorly educated, a few struck it rich overnight. Satellite dishes started popping up near shacks. Big, expensive cars—Cadillacs, BMWs and Mercedes Benzes—began rolling through the streets.
In early 1983 stories began appearing in the Los Angeles Sentinel, the South Central area's black-oriented news weekly, about the crack houses that were springing up here and there. "I would say that things got worse when cocaine hit the streets in '83 because prior to that all the brothers that were slangin' were selling water, Sherman, angel dust, PCP, or whatever you wanted to call it," said Leibo, an East Side Crip. "About '82 or '83 is when rocks hit the streets hard."
Fed by an unending supply of cocaine from Danilo Blandon, Ricky Ross's crack trafficking organization prospered and grew unhindered by law enforcement in the ghettos of Los Angeles. The cocaine business was turning out to be exactly as he'd seen it in the movies.
"Right when I was starting to sell drugs Scarf ace came out," Ross said, referring to the 1983 remake starring Al Pacino as a cocaine kingpin. "A whole bunch of us went and saw it, like 10 or 15 of us. We took our girlfriends, and we see this guy who. . .don't have nothing and the next thing, he's on top of the world." Like his fictional hero, Ross said, "I became a drug-dealing legend."
Chico Brown, a Corner Pocket Crip who was also heavily influenced by Scarface, agreed. "You ask any of the people who they looked up to back when they was startin' out, and all of them will tell you it was Ricky Ross. He was like a legend in the neighborhoods. He got a lotta people started."
Ivan's whereabouts were no mystery to Danilo Blandon. He'd been observing Ivan's dealings with Ricky Ross for quite some time, seeing their sales expand, watching the venture become more and more profitable. He had to admit it; he was jealous. Despite all the work he'd been doing for Norwin Meneses personally—keeping the books, working for the Contras, helping Norwin's wife mn the restaurant and the T-shirt company—the drug kingpin was still nagging him to move more cocaine. Every couple of months Blandon would drive all the way to Meneses's house in Pacifica, a nine-hour trip, pick up another kilo or two, drive back to L.A., and then have to put up with Meneses flogging him to sell it.
Blandon had been hitting up other car salesmen he knew, helping other cocaine dealers through dry spells now and again, but he wasn't making any great strides. He estimated that he spent "about a year, year and a half, you know, with the same two, one or two keys."
But Ivan Arguellas, another Nicaraguan exile scuttling around L.A. with cocaine to sell, had found this kid in South Central, Ricky Ross, and they were really starting to move the powder. Blandon knew Ivan, who also used the name Claudio Villavicencio, because of their shared heritage and their new profession. He sold Ivan a little cocaine every once in a while. But Ivan had other sources of supply.
The Torres brothers—the two giants with the little car lot—also got into the cocaine business around this time, according to Blandon, who surmised that they were supplying Ricky Ross. "I supposed that maybe they start with Rick," Blandon said. "I know them so well, you know, they are Nicaraguan people. . .. When I saw them getting rich, getting money, so I saw that they start doing business with him."
If the Torres brothers were dealing with Ross, as Blandon claims, it is likely that they were doing so as Ivan's suppliers, because Ross said he never met the Torreses face-to-face until long after Ivan disappeared.
Blandon had no other sources. He was stuck with Norwin Meneses, who was squeezing him dry for the Contras, charging him $60,000 a kilo and taking nearly every penny he made. Norwin was holding him back, he believed. "I didn't have my own car," Blandon complained. "I have to rent cars, you know. I used to work with him [Meneses], you know, coming from San Francisco, going back, and I thought, 'Hey, what are you doing? You're not doing nothing, you know? You're not making no—no money.'"
That's why Ivan's deal with Ricky Ross looked so good to Blandon. This little kid was a mover, and he was getting bigger all the time. "I wished I could have known Ricky. . .because all the time I want to grow in the business," Blandon said. "He [Ivan] and his brother-in-law [Henry] was selling to Rick. So I wish I could [have known] him. ... I knew how much they were selling."
Blandon got his wish. Ivan Arguellas caught a bullet in the spine that crippled him from the waist down. He was hospitalized for months and forced to quit the cocaine business while he recuperated. "He got shot by his wife," Blandon said. "He's paralyzed right now." A tough break for Ivan, but it was the break Danilo Blandon had been waiting for. Ivan's customers had fallen to his brother-in-law, Henry Corrales, a drug dealing amateur. "Henry was kind of a knucklehead," Ross recalled. "He was a nice guy who just wanted to party all the time. He didn't know what he was doing."
Blandon agreed. "When he [Ivan] got in the accident, it started Henry Corrales getting in [the business]," he said. "Henry was running the business because his brother-in-law was in the hospital. And when the guy that got paralyzed get in the hospital, he lost that [cocaine] contact. And Henry didn't have any contact more than me when he took over."
In all the time he'd been hanging around Ivan, Henry apparently hadn't made any connections of his own. In a business where a man is only as good as his sources, Henry Corrales was hurting. Ivan's people expected him to deliver. And where the hell was he going to come up with the cocaine for these black gangsters downtown?
When Blandon came by to offer his sympathies and lend a hand, Henry must have seen him as a savior. "When he doesn't have any sources, [he] asked to me and that's when we began the relationship with him," Blandon said. Corrales told him Ross was "the best customer" he and Ivan had, "a big customer that they were selling five or ten [kilos] a week. . .. For me, it was a big customer."
Henry was so grateful for Blandon's help that he agreed to share his profits on every kilo he sold, fifty-fifty. "We split the commission," Blandon said, but he couldn't remember how much that was. "I was selling to Henry Corrales and Henry Corrales was selling to him [Ricky]. Henry was coming to me to pick up the stuff."
Ross denied he was receiving that much cocaine from Henry when he started his relationship with him. He and Ollie were still dealing mostly ounces at that point, he said. It was in multi-ounce lots, to be sure—they'd buy four or eight ounces a day. But he said they did not graduate to buying kilos until later. Blandon said he knew how much Ross had been buying from Ivan because the quantity he sold him determined his price.
Ross said he did not know that Danilo Blandon had adopted him as a customer. Just as he hadn't known where Ivan got his coke from, he didn't know where Henry got his. It's not that he wasn't curious. It was just a question cocaine dealers didn't ask each other.
In the cocaine business, serious dealers had good reason to cut out their wholesaler and buy directly from the source. The closer they got, the cheaper and purer the cocaine became. The more hands it passed through, the more times the product got stepped on, or cut, and the lower the profits became.
All Ricky knew was that once he started dealing with Henry, his cocaine prices fell again. Maybe Ivan's disappearance wasn't going to be such a bad deal after all, Ross decided. "After we started dealing with Henry, it got even better."
Not long afterward, Ross started noticing a slight change in the cocaine market around South Central. Some of his customers were taking the cocaine powder he was selling them and turning it into weird little rocks—just like the one he'd seen back in 1979. A couple dealers had actually starting trying to sell rocks, he noticed, but the dopers Ricky knew regarded the product suspiciously.
"At first, nobody wanted rock," Ross said. Nobody wanted to mess with cocaine that didn't look like cocaine. Secondly, the price was too low. How could anything claiming to be cocaine cost only $25? It had to be a rip-off.
But Ricky vividly recalled his Christmastime experience with the pimp a couple years back, when the man had smoked a rock and come running back waving $100. If this stuff catches on, Ross considered, it might be worth looking into. Then one of his customers asked him if he had any rock to sell, and Ross got the message.
"See, the way rock came into play, it would be like, say somebody was going to work early in the morning and they wanted some cocaine. They wanted to get high and they'd say, 'Damn, I gotta cook this shit up and I'm late for work,' and they'd ask me, 'Can you cook it up for me?"' It was a question of convenience. Ross said sure, and promptly hired someone to make it for him.
"Know what I got in chemistry in school? A 'F'!" Ross laughed. "First started out, I was paying someone to cook it. But everybody always used to make it more complicated than it was. Like the cookers never wanted you to learn how to cook it. So everybody kind of kept it like hush-hush. 'Oh man, you got to let me do it. You goin' to mess it up.'"
In truth, rock cocaine is easy to make. Put cocaine powder in a pan, add some water and baking soda, and heat until it starts crackling. Done.
The recipe had been floating around a little while before it caught hold in South Central. In November 1979, Tennyson Guyer's Select Committee investigating cocaine provided the first public airing of the ingredients needed to turn powder into crack. "A saucer, a glass, a paper towel and Arm & Hammer baking soda are about all that is needed," testified Dr. Franklin Sher of Walnut Creek, California, a Bay Area physician whose family owned the country's largest freebase paraphernalia company at the time.
In 1981 an author named T. Davidson published a pamphlet, The Natural Process: Base-ic Instructions and Baking Soda Recipe, out of Tustin, California, an Orange County town about thirty miles east of L.A., which contained step-by- step instructions on how to make crack. Davidson hailed the simple procedure as "safe, healthy and economical."
Ross said he watched his cooker for a while and thought, "'What the hell, I'm going to try it.' Because the first person that ever tried it was me. Ollie didn't try it first. I tried it first. Then I told Ollie, 'You can do that shit too.' So we started cooking it ourselves and we started selling what we called 'ready rock.'" He crumbled the rock up and delivered it in $20 hits—nuggets about the size of a ball bearing—first in tiny bits of aluminum foil, then later in tiny glass vials.
Ross smoked some himself and found the craving for more so powerful that he vowed to stay as far away from the shit as possible.
But, man, what a product.
He saw how his customers reacted. Once they tried it, they never wanted anything else. "I think what made us start smoking was curiosity and frustration. I know that it wasn't the Black brothers' or sisters' intention to smoke cocaine as a career. It's just so addicting. It's like one hit is one too many and a million hits is not enough," explained Big Shiphead, a Shotgun Crip since he was twelve years old. "In my opinion, it's the worst drug that ever hit the face of this earth."
What happened next was just what the scientists had been predicting since 1974. As base had done in Lima and La Paz eight years earlier, rock caused a sensation in South Central. But it was an underground sensation initially.
A 1985 study by two University of Southern California social scientists provides some of the only existing documentation of crack's progression in South Central in the early 1980s, when Ross and others began selling it. It is like reading the origins of the Black Death.
"We ... reviewed the LAPD South Bureau Narcotic Division activity reports from January of 1982 to the present [April 1985]," sociologists Malcolm Klein and Cheryl Maxson wrote. "From January to April of 1982 there are notes of cocaine increase with freebase as the most popular method. In May there is a random comment about 'rock hard' pre-free-based cocaine. With continuing increases in arrests, the first real mention of rocks came in September 1982 in the Southeast division. It showed up in 77th Division after another five months. Thereafter, monthly reports continued to report the presence of rock cocaine throughout the Bureau in increasing amounts."
And that was only what the LAPD was finding when they busted somebody stupid, according to Ross; "They mighta got some dude with a few rocks in his pocket, but the LAPD didn't know nothing about what was really goin' on. The LAPD didn't mess with us at all."
Former LAPD narcotics detective Steve Polak, who was riding the streets of South Central at that time, said Ross's viewpoint was essentially correct. Street cops like him, Polak insisted, saw what was happening. As the USC study showed, many of them were putting it in their reports. But none of them really knew what they were looking at, and the brass didn't seem that interested in finding out. "We didn't know what it was. I was there as a cop in uniform. I was stopping people on the streets and seeing these rocks. I'd see them throwing these rocks, these little things, and I'd go, 'What the fuck is this?' I didn't know what the fuck it was, you know?"
When Polak asked, he was told they were bleached peanuts. "I'd put the handcuffs on them and I'd say, 'You know this is dope. I carry bleached peanuts all the time in my pocket and throw them away when I see the cops, so, you know, come on, give me a break.' It's just a matter of sending it to the lab and seeing exactly what he had and, you know, it was coming back this coke stuff."
Polak started seeing other strange items as well. "We were stopping these people and they had these little bottles of Puerto Rican rum and little glass pipes and what we called a torch, a torn-off piece of a coat hanger with a cotton swab wrapped around it. What they were doing was dipping the swab in the rum because of its high alcohol content and then they'd put the rock on top of the glass pipe and then they'd flame [the swab] up. But then again, you learn, you know? There's nothing written on this shit."
Once word got out that the Five-0 was wise and was starting to bust people with rocks on them, Polak said, "We'd drive by and see them put their hands in their mouths. And we'd come back an hour later and they'd either be overdosed or wired like a motherfucker, jumping all around like little tops. They'd put it in their mouths and they'd leave it in so long it would start to dissolve, like an aspirin. These guys were falling all over."
Smarter users found crack to be an ideal drug for the streets of South Central, where the cops tend to frisk young black men just for looking at them funny. Now you could actually carry dope with you in public, and the cops couldn't get there fast enough. "It's easy to get rid of in a pinch. Drop it on the ground and it's almost impossible to find," complained a Miami narcotics detective in 1986. "Step on it and the damned thing is history. All of a sudden your evidence ceases to exist."
The inner city of Miami started seeing crack about a year after the Los Angeles market started, but on a much smaller scale. Longtime Miami area drug researcher James Inciardi, a criminology professor, wrote in 1988 that "although crack in one form or another appeared in Miami as early as 1982, at first it was generally limited to the Caribbean and Haitian communities." The drug "advanced to the wider drug subcultures in 1984," Inciardi wrote. "By early 1985, crack had become widely available in every inner-city neighborhood in the greater Miami area."
According to several sources, 1985 was the year Jamaican posses took over the nascent crack market in inner-city Miami and began organizing and expanding it. Though the Miami market trailed the L.A. market by about a year or two, the similarities between them are striking in some respects. Both markets exploded following political upheavals in foreign countries—upheavals in which the CIA played an active role.
Just as the South Central crack market began flourishing when political exiles from Nicaragua arrived to raise money for themselves and their political causes, the Miami crack market didn't really take off until political exiles from Jamaica moved in. The intelligence division of the Drug Enforcement Administration, in a 1994 report on crack cocaine, offered a startling explanation for the evolution of the Jamaican posses from small-time dopers to "one of the most effective trafficking groups" in the United States, rivaled only by the Crips and Bloods of Los Angeles.
Since the 1970s Jamaica had been run by a socialist government headed by Michael Manley, a graduate of the London School of Economics, who immediately angered U.S. officials by recognizing the Cuban government of Fidel Castro and supporting socialist rebels that a CIA proxy army was battling in Angola. In 1977 two investigative reporters exposed a "destabilization program" against Manley's government reportedly being run by the CIA's Jamaican station chief, Norman Descoteaux. The campaign included covert shipments of arms to Manley's opponents, the use of selective violence, bombings, and assassinations, covert financial aid to the conservative Jamaica Labour party, the fomenting of extensive labor unrest, and bribery.
One of the CIA agents who would later play a key role in the Contra project, Luis Posada Carriles—a Cuban Bay of Pigs veteran with a history of engaging in arms-for-drugs deals—was sighted in Jamaica near the scene of at least one bombing, the reporters wrote.
During the course of a bitter election campaign in 1980 between Manley and a candidate from the CIA-backed Jamaican Labour party, rival political gangs killed "more than 700 people," according to the DEA. Manley lost the election. What happened next was in many ways a carbon copy of what had happened in Nicaragua and Los Angeles a year earlier, despite the fact that here the political changing of the guard was roughly the reverse of the Nicaraguan situation. "Following the election, many of these political gunmen left or were driven out of Jamaica and immigrated to the United States. They settled into the large Jamaican and Caribbean communities in Miami and New York City," the DEA intelligence report stated. "In the early 1980s, the U.S. posse leaders maintained a sense of allegiance to their political parties in Jamaica, sending weapons and dmg profits back home." Eventually, the DEA said, the Jamaican traffickers in the United States "evolved from small-time marijuana sellers into nationwide cocaine and crack distributors."
The political leanings of Miami's and South Central's major cocaine suppliers were not known to lower-level dealers and hustlers, who probably wouldn't have cared anyway. Dope was dope. Politics was polities. And it wasn't until one got to the very top of the cocaine business that the two worlds intersected.
Ricky Ross had no political interests at all, and never would. His worldview was limited to South Central, and how much cocaine he could move into it. What his Nicaraguan suppliers were doing with their money was their business, he figured.
What he was concerned with in late 1982 was that the new crack market in South Central wasn't turning into the money-maker he'd been expecting. Dealers had gotten away with charging more for powder, he said, because it sold in more expensive doses. When you were talking to someone about $300 for a gram or $3,000 for an ounce, you could pack a little more profit in around the edges, and nobody would say anything. "We was making more money when it was powder," he groused. "[The market] went to powder and rock, and eventually just went straight to rock because everybody had stopped snorting. I had to get out on the street myself and sell $20 rocks, run at the cars."
The reason crack became so popular in South Central and elsewhere was that it only cost a few bucks to become a customer. Crack normally sold in $25 hits, but you could find tiny rocks for as little as $5. "One of the principles of modern marketing is to develop products for increasingly small market segments at prices each segment can afford. Crack pushers accomplished this by creating prepackaged units at more-or-less standard sizes and prices," drug experts David Allen and James Jekel wrote in 1991.
Yale cocaine expert Dr. Robert Byck agreed that crack was a triumph of modern marketing principles. But there were more reasons than packaging for why it took off so quickly, he said. "I think the crack phenomenon is not just a matter of smoking freebase. What happened with crack was a change in the selling, distribution, and price. It was sold in a very convenient form, which was accessible to a wide range of people. Smoking, unfortunately, in our society is not an abnormal behavior. Injecting something intravenously is. Snorting something into your nose is abnormal.
"So here was a way of taking a drug that was completely within the range of so-called normal behavior. And. . .gave you the same kick that you got from shooting it intravenously, but this was free of the risk of AIDS. It was socially acceptable and, on top of that, the drug was sold in a very convenient unit package. This was to drugs like McDonald's was to hamburgers. They knew how to sell it. And I think that what happened to crack was, they knew how to sell it."
Crack's second big advantage over powder was that it democratized cocaine not only for users but for dealers as well. It didn't take a large investment anymore to call yourself a player. You could buy half a gram of powder for $150, rock it up, and get ten to twelve doses of crack, each of which would give the buyer a bigger blast than ten times as much powder. And you doubled your money.
"Crack increases its own on-the-street sales force because many addicts find they must become pushers in order to make enough money to sustain their own habits," Allen and Jekel wrote. "And they can get cocaine powder at 'wholesale' prices this way and make their own crack."
For Ross, that was the biggest problem with crack. Now he had to worry about competition from customers as well as other dealers. Competition meant fewer customers, and that meant less volume, negating the very advantage of selling crack in the first place. At the same time, his costs were going up; crack cost more to make. When he sold powder, all he needed was a scale and a bag of lactose. Now he needed a place to cook the shit up, because he couldn't do it in his cousin's apartment. He had to rent an apartment and pay rent bills and power bills. And then he needed vials, and people to help put the crack in the vials. To get the necessary volume, they had to pay people to go out and sell it, because he and Ollie couldn't do it all by themselves now. Overall, it was a bigger headache, with lower profits.
Since standardization had eliminated Ross's strategy of cutting street prices and boosting volume, he had to figure out another way to raise his profits. Fortunately, Danilo Blandon was a stickler for quality, and Henry's cocaine was of a very high purity. By experimenting, he found that he could dilute the cocaine even further, before he mixed it with the baking soda, and his customers couldn't tell the difference. Because the dope was being cooked and smoked, purity and appearance didn't matter as much as it once had.
"We called it 'blowup' and what we would do is cut it with procaine," Ross said. "You could get more weight and it would look bigger." Ross settled on a three-to-one cut, which turned one ounce of powder into four ounces. "You could turn it into as many as you wanted but the more you cut it, the less it was acceptable. . .one batch we cooked up we couldn't sell it. Customers wouldn't take it no more."
Now he had four times as much crack to sell for roughly the same cost. But a couple months later, other dealers began using blowup too. That's when he decided to get out of street-corner crack sales and get into wholesaling, selling to other crack dealers.
There was a new thing happening in parts of South Central and the San Fernando Valley suburb of Pacoima: rock houses, which some dealers had set up as one-stop shopping centers for crack. You made your crack in the kitchen, sold it in the dining room, and the customer smoked it in the living room. When they were out, the cycle began again. Since crackheads smoked hit after hit after hit until they ran out of money, it made more sense to get them in the house and keep them there, rather than go to a park or stand on the street drawing a crowd by making repeat sales all day long. Some of the more enterprising rock house operators had "strawberries" back in the bedroom if that's what you wanted, crack whores who would suck a dick for a suck on the pipe.
James Inciardi had been a drug researcher in Miami for years and considered himself to be a hardened and streetwise observer. But nothing, he wrote, prepared him for the nightmarish world of a crack house. "I observed what appeared to be the forcible gang-rape of an unconscious child. Emaciated, seemingly comatose, and likely no more than 14 years of age, she was lying spread-eagled on a filthy mattress while four men in succession had vaginal intercourse with her," Inciardi wrote. "After they had finished and left the room, another man came in and they engaged in oral sex." Inciardi discovered that she was a "house girl," who got food, clothing, a roof over her head, and all the crack she wanted if she put it out for the customers.
That was where he could still use his high-volume, low-price strategy, Ross decided. Those new rock houses and those baby brand-new dealers out there— those hustlers buying half-grams and "slanging" on the corners—they would be his customers. Ricky would sell his "ready rock" in batches, cheaper than they could make it themselves, prepackaged and ready to peddle. And the other dealers could have the street trade and the competition and cops that went along with it.
The move, which Ross places near the end of 1982, worked. It reduced his operation's costs and took him off the streets. It reduced his customers' costs as well. He moved once again into an arena with no competition, where he was free to set his own prices, cherry-pick the best customers, and undercut anyone who tried to move in on him.
"We was like. . .the first quantity dealers," Ross said. "Because there wasn't nobody really dealing quantity in L.A. at that time." Others agreed. "Ricky, as far as I'm concerned, I mean, there had to have been someone before him to hand him a rock, but he had to be one of the very first people, if not the first guy, to really sense the economic potential of street-level marketing," L.A. Times reporter Jesse Katz said in 1995. "In my story I called him the first crack millionaire to rise from the streets of South Central." Katz's 1994 profile, headlined "Deposed King of Crack," said of Ross, "He didn't make the drug and he didn't smuggle it across the border, but Ricky Donnell Ross did more than anyone else to democratize it, boosting volume, slashing prices and spreading disease on a scale never before conceived."
Ross told CIA inspectors that he was South Central's biggest cocaine dealer by the end of 1982. "I knew this because it was my business strategy to know my competitors and stay on good terms with them," Ross told the agents.
James Galipeau, a longtime probation officer in the South Central area, said Ross was indeed a pioneer. "The thing about Rick that set him apart from the other guys who started out selling when he did, guys like Honcho Day and Michael Harris, is that pretty soon, they ended up buying from him. And they were learning from him."
But it seemed that as soon as Ricky got one problem solved, another one would crop up. Now Henry was freaking out on him. Henry had never been all that reliable to begin with, Ross said, but he was getting worse all the time. He wasn't showing up when he said he would. Sometimes at night he didn't want to come down to the 'hood. And he was looking real nervous when he came. Rick didn't like it. Henry was still his only supplier. If he took a hike like Ivan did, Rick would have to find another quantity dealer with Henry's prices. Fat chance of that.
As it turned out, something was going on with Henry. He didn't have the stomach for the business. And the more cocaine he sold to Ricky Ross, the more fretful he became. By late 1982 or early 1983, Ross said, Henry had gone from selling him ounces to selling him kilograms. And Blandon said he was selling many, many kilos to Ross through Henry.
"How many kilos a week?" Blandon was asked.
"To Henry?"
"To Henry, to Ricky."
"To Henry could be 10 or 15," Blandon said.
"Ten to fifteen?"
"Yes."
"Would 50 a month be a fair estimate?"
"In 1983, it ... through Henry, yes."
That means Ricky Ross—within a year of crack's first real appearance in South Central L.A.—was selling between 1,000,000 and 1,250,000 doses of crack every single month (using DEA estimates of 20-25 rocks of crack per gram of powder, 20,000 to 25,000 per kilogram).
During 1982 and 1983, Blandon said, he and Meneses brought "three or four" planeloads of cocaine from Miami to Los Angeles. According to the Torres brothers, each one of those loads from Miami ranged between 200 and 400 kilos. These "regular" flights continued until at least 1984, they said. (Whether all of that was sold to Ross, or was divided among other customers of Meneses and Blandon, is not clear.)
Blandon said Henry's cocaine deals with Ross began frightening the novice dealer. "He was selling him so often he was getting so paranoid, you know?" Blandon said. "Somebody from his organization was in jail. . .. He told me, 'I've got $200,000, $300,000, I'm going to leave.'"
Corrales, Blandon said, planned to retire to the relative safety of Honduras. "He feel that he got a lot of money and he told me, 'Let me introduce you to my guy because my brother-in-law is still in the hospital.'" Blandon explained that Ivan Arguellas was still considered "the owner of Ricky Ross" by Henry, but since Ivan was laid up, and Henry was leaving town, Henry wondered if Blandon would mind dealing with Ricky.
Henry was not turning over his best customer for free, though. Blandon would have to continue splitting commissions with him. "He wanted to leave to Honduras, be there and get some commission," Blandon said. "He wanted that I give some commission to him, you know? That was the proposal." Blandon agreed, and Henry took him down to South Central to meet the rising young crack magnate.
"He introduced me, right in front of the house of Mary," Blandon said, referring to Mary Monroe, a friend and employee of Ross. "It was in South L.A.. . .. that was the house that later came to be the warehouse for money, and to deliver."
Ross recalled the meeting well. "We had a place, one of the ladies in our neighborhood, we used to hang out in her back yard and play pool, mess with her daughters. Danilo met us in the front yard. Henry came in the back and knocked on the door and said he wanted to talk to me. He said, 'Come on. Let's go for a ride.' So we got in the car and we were riding around and he said, 'I'm leaving and I'm going to turn you over to the man. He's gonna do a better business than what we been doing and you gonna have a better price. Everything is gonna be better for you."
The price he paid for his cocaine fell once again. "After we started talking directly with Danilo, I mean the price was just. . .everybody was saying it was the bottom. That's what they used to say. 'You've got the cheapest price in town.' Everybody else was paying like $3,000 for an ounce of cocaine and when me and Ollie started dealing directly with Danilo, I think we was getting it for like $1,800 an ounce."
After his trip to South Central, Blandon knew why Henry was nervous. It was "a rough area" of town, he said, and the place fairly bristled with firearms. For his first drug delivery, "We went to an apartment that was on the second floor and there was a door, an iron door. And there was a guy, you know, with a shotgun: 'Who are you?' We identify ourselves, then you have to pass another guy with another machine gun, or shotgun. And inside, near the dinner table in the living room, there were about five guys, and all the guys were there with a gun at the table."
When asked to date that encounter, Blandon was unclear. "1982," he said under oath. "Excuse me. Sorry. 1983. 1983, I think so really. 1983. Excuse me, I make a mistake. 1984, because I was living in Northridge. Yes, 1984." Ross said he was introduced to Blandon about six or seven months after he started dealing with Henry, which would put his first face-to-face meeting with Blandon some time in the fall of 1982 or early 1983.
Henry's retirement also seemed to improve the quality of the cocaine Ross was getting. When he took it to the dealers who were his customers, they raved about it. "They said that the stuff was not cut. It was pure." Ross had finally reached the source, the wellspring from which pure, uncut cocaine flowed in abundance. His street-dealing days were over. Now, he was the man to see.
And true to form, he began to innovate. If there was a neighborhood where the dealers were not pushing his supply, Ross said, he would find the hood's top dealer and pay him a friendly visit, bringing with him a couple kilos of Danilo's finest, which he would give the rival dealer free as a measure of his respect. Try it out and see what you think, he would tell them. And then Ross would tell them the price, and he would have another customer.
Other times, he would invite dealers to smoke parties, where all the crack they wanted would be available on the house. There was plenty more where that came from, they would be told. And the price. . .
Ross said his first deal with Blandon was for "around eight ounces." Blandon, however, said it was much more than that, at least a kilo, and that their business grew geometrically from there. "In those times, there were one, two, three, four, five, six, maybe seven a day," he said. "Every day."
At seven kilos a day, Ross was moving more than 200 kilos of cocaine every single month. That meant he was pumping out around 165,000 vials of crack a day—5 million rocks a month.
"There is no doubt that Ricky Ross created a massive distribution network that poured enormous amounts of crack into Los Angeles, and elsewhere, during the mid-1980s," the Justice Department's Inspector General concluded in 1998, calling it a "huge drug empire."
"I had as many as five cookhouses. Because that was our hardest thing, to cook. Once you cooked it, it was sold," Ross said. Compton crack dealer Leroy "Chico" Brown told of visiting one of Ross's "cook-houses," and his description matched the one Ross gave. A house in a cheap neighborhood would be purchased by a front man and gutted. The windows would be barred and steel doors installed. Large, restaurant-size gas ranges and big aluminum pots would be brought in at night and set up. And then the cookers went to work. They would work in shifts, arriving and departing as if they lived in the house. The only visitors would be the couriers, one to drop off the powder and the other to pick up the crack.
"They were stirring these big pots with those things you use in canoes," Brown said with wonder. "You know, oars."
"Working around the clock, taking the age-old axioms of good business to ominous extremes, [Ross] transformed a curbside operation at 87th and Figueroa into the Wal-Mart of cocaine," the L.A. Times wrote in 1994.
South Central L.A. had become a boomtown of sorts. What happened there was reminiscent of what occurred in the hills and hollows of Kentucky during the coal boom of the 1970s, when seemingly worthless land was suddenly worth millions. While most of the residents remained poor and poorly educated, a few struck it rich overnight. Satellite dishes started popping up near shacks. Big, expensive cars—Cadillacs, BMWs and Mercedes Benzes—began rolling through the streets.
In early 1983 stories began appearing in the Los Angeles Sentinel, the South Central area's black-oriented news weekly, about the crack houses that were springing up here and there. "I would say that things got worse when cocaine hit the streets in '83 because prior to that all the brothers that were slangin' were selling water, Sherman, angel dust, PCP, or whatever you wanted to call it," said Leibo, an East Side Crip. "About '82 or '83 is when rocks hit the streets hard."
Fed by an unending supply of cocaine from Danilo Blandon, Ricky Ross's crack trafficking organization prospered and grew unhindered by law enforcement in the ghettos of Los Angeles. The cocaine business was turning out to be exactly as he'd seen it in the movies.
"Right when I was starting to sell drugs Scarf ace came out," Ross said, referring to the 1983 remake starring Al Pacino as a cocaine kingpin. "A whole bunch of us went and saw it, like 10 or 15 of us. We took our girlfriends, and we see this guy who. . .don't have nothing and the next thing, he's on top of the world." Like his fictional hero, Ross said, "I became a drug-dealing legend."
Chico Brown, a Corner Pocket Crip who was also heavily influenced by Scarface, agreed. "You ask any of the people who they looked up to back when they was startin' out, and all of them will tell you it was Ricky Ross. He was like a legend in the neighborhoods. He got a lotta people started."
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Re: Dark Alliance: The CIA, the Contras ..., by Gary Webb
by admin » Sat Feb 14, 2026 12:48 am
"He would have had me by the tail"
Barely a year had passed since the CIA had taken over the financing of the Contras, and already the covert war was no longer a secret. The week before the 1982 elections, Newsweek magazine published the first detailed account of the Reagan administration's support of the Contras: "America's Secret War: Target Nicaragua." The cover story portrayed the Contras—whose forces had built up to around 4,000 men by this point—as being in a position to overthrow the Sandinistas. There were full-color photographs of paratroopers dropping from the sky, which made it appear as if the invasion was already under way.
But that was a gross exaggeration of reality. The Contras, in truth, had just started receiving the American weapons and supplies that Reagan had promised them a year earlier. According to one account, the main source for Newsweek 's story was none other than CIA director William Casey, who wanted to ensure that the Contra project didn't get shelved. Now that it was public knowledge that the Reagan administration was helping the Contras, Casey's reasoning went, it would look like a sellout—another Bay of Pigs—if it stopped.
The reporting incensed some members of Congress, particularly those who had been told by CIA officials that the Contras were merely border guards, keeping the Sandinistas from sending arms into El Salvador. The Contras' first major act of war, in fact, had nothing to do with El Salvador. Under CIA direction, two bridges linking Honduras and Nicaragua were blown up in March 1982, an operation Contra commanders considered to be the opening shots of the war.
In response to the Newsweek report, Congressman Tom Harkin proposed a complete cutoff of funding for all paramilitary activities against the Nicaraguan government. The fact that the war was illegal, Harkin argued, was nothing compared to the U.S. government cozying up to "perhaps the most hated group of Nicaraguans that could exist outside the borders of Nicaragua, and I talk about the Somocistas." Harkin called them "vicious, cutthroat murderers" and urged Congress to "end our involvement with this group."
When the Reagan administration heard about Harkin's proposed amendment to the annual defense budget bill, Oliver North later wrote, it "hit the roof. . .. The President let it be known that if Congress approved the Harkin Amendment, which was unlikely anyway, he would promptly veto it." Instead, Congress passed the first Boland Amendment, named for the Massachusetts Democrat, Edward P. Boland, who authored it. Boland, a member of the House Intelligence Committee, knew full well that the CIA was funding the Contras, and he was not opposed to it. But Harkin's move—making a public issue out of a secret CIA project—had put Boland on the spot and riled up other liberals. Boland told Harkin that Congress had no business passing laws like the one he was proposing. That's why there was an Intelligence Committee, Boland lectured, "to keep the nation's secrets and exercise sensible and prudent oversight." The Intelligence Committee, a body generally protective of the CIA, had been one of the few committees told of the secret Contra project.
To quiet Harkin and other liberals, Boland agreed to an amendment that prohibited the use of taxpayer funds "for the purpose of overthrowing the government of Nicaragua or provoking a military exchange between Nicaragua and Honduras." The House passed it on Christmas Eve 1982 by a vote of 411-0.
No doubt the lawmakers were eager to get home for the holidays, but the reason the Boland Amendment received unanimous support was because it accomplished nothing. It was largely a fraud, designed to make it look as if Congress was cracking down on the Contra project without actually doing so.
Internal government memos show that the CIA, the White House, the Defense Department, and the Contras' congressional supporters knew that the Contras had no hope of defeating the Sandinistas. Since there was no way in hell the Contras were ever going to overthrow the Nicaraguan government, their supporters reasoned, they could continue spending CIA funds despite the Boland Amendment. If the Contras were given money for one purpose—arms interdiction—and decided to use it another way, well, that wasn't the CIA's fault, was it? The money hadn't been given "for the purpose" of an overthrow.
Indeed, by early 1983, CIA dollars were pouring into Honduras and Costa Rica in torrents. Best of all, the Contras no longer had to ask their Argentine advisers for permission to spend it. Most of the Argentines were called home in 1982 after their country's disastrous war with Great Britain over the Falkland Islands.
Enrique Bermudez and the other top-ranking FDN officials started living like real generals. In Tegucigalpa, Honduras, Bermudez moved into "an elegant two- story place, all dark wood and balconies, overlooking the Tegucigalpa basin from a lovely hillside lot in the exclusive neighborhood of Ciudad Nueva." Bermudez and his staff spent their evenings dining on roasts, puffing cigars, quaffing tequila, or carousing in the excellent casinos downtown. "Bermudez had developed a taste for the teenage girls his men were recruiting in Nicaragua," journalist Sam Dillon wrote in his 1991 book Comandos. "Bermudez was inviting them from the base camps back to Ciudad Nueva, one at a time, to try out as his 'secretaries.'"
Dillon wrote that the CIA was sending "tens of thousands of dollars a month to Bermudez's general staff to pay the 'family aid' salaries of his field commanders, and other prodigious sums to buy food for the thousands of FDN fighters." But much of that aid was being diverted and never reached the soldiers in the field. The Southern Front commanders in Costa Rica, Eden Pastora and "El Negro" Chamorro, constantly complained that Bermudez and his CIA friends were stiffing them on the supplies, raking off the best weapons and the best food and sending them garbage—planeloads of diapers, feminine napkins, and extra- large underwear. It wasn't merely unfair, they argued, it was an insult to their manhood.
"Bermudez's staff officers were pocketing the money," Dillon wrote. "They were also stealing half the CIA's food budget. Though they routinely shipped only half the necessary beans, rice and other foodstuffs to the base camps, they were billing the CIA for full rations."
Several accounts, including Dillon's, paint a picture of massive corruption inside the FDN, perpetuated by Bermudez and his closest associates, death squad leader Ricardo Lau and millionaire land baron Aristides Sanchez. At one point, dozens of midlevel FDN field commanders petitioned to have Bermudez fired for stealing money and squandering supplies. Some CIA field officers were pushing for his removal on the same grounds.
But Bermudez had friends at CIA headquarters at Langley, and after he contacted them about the incipient mutiny, the complainers were the ones booted out of the FDN. The CIA brass felt they couldn't dump "the obedient asset who'd helped construct their entire project," Dillon wrote.
Still, congressional discomfort over the CIA's army was growing. In May the House Intelligence Committee issued a special report suggesting that the "operation is illegal" and that the administration knew plainly that the Contras were trying to overthrow the Nicaraguan government. On July 28, 1983, the House passed a resolution by a 228-195 vote to stop all aid to the Contras. "Opposition in the House to aiding the Nicaraguan rebels seemed almost insurmountable and it would be easier for House Democrats to block passage of a new aid authorization in 1984 than it had been to cut it off in 1983," former State Department official Robert Kagan, a Contra supporter, wrote.
Yet it was somewhere around this time, according to Danilo Blandon, that he stopped sending the profits from his L.A. cocaine sales to the Contras. At other times he has said it was late 1982. In either case, Blandon said that the reason he was given for halting the donations was that the Contras had plenty of money.
"In 1983, okay, the Contra gets a lot of money from the United States," he told a federal grand jury in 1994. "And they were—when Reagan get in the power, Mr. Reagan get in the power, we start receiving a lot of money. And the people that was in charge, it was the CIA, so they didn't want to raise any money because they have, they had the money that they wanted."
"From the government?" Assistant U.S. Attorney David Hall asked.
"Yes, for the Contra revolution."
"Okay."
"So we started—you know, the ambitious person, we started doing business by ourselves," Blandon said.
"To make money for yourselves?"
"Yes."
"There's a lot of money to be made?"
"Yes."
Blandon told CIA inspectors that FDN commander Enrique Bermudez came to California sometime in 1983 and told him personally that it wasn't necessary for the Los Angeles group to raise any more money. "The FDN needed people, not money, because the CIA was providing money," he said Bermudez told them. But Blandon's mentor, Norwin Meneses, said Blandon remained a loyal financial supporter of the Contras for the duration of the war. Asked when Blandon stopped giving the Contras monetary support, Meneses replied, "Never, as far as I know."
Blandon said he was working for Meneses at the time the Contra cocaine kickbacks ended. "I continued working for a period of time, about six months, and then I changed because Meneses was—it was the same thing. I wasn't making any money." Blandon was tired of being stuck in the middle of fights between Norwin and his estranged wife, Maritza. Meneses was still charging him too much for cocaine and was refusing to let him share in the spoils. "When I was with Meneses, you see, I didn't make no money at all," Blandon griped. "Meneses was charging me, you know, a big price, that I couldn't meet. I couldn't make enough money, you know, because all the time I owe him."
Blandon said he owed Meneses around $100,000 and couldn't seem to reduce the debt because "I didn't make any money. So I start looking for my own resource, or my own sources." He found them by going behind Meneses's back and dealing directly with Norwin's L.A. suppliers—a couple of Colombians he knew only as Luis and Tony, to whom he had been delivering cash for his miserly boss. "I used to deliver money to the Colombian connection from Meneses, and I got a friendship with them and they know how hard I was working at that time. It was easy for me to ask them for credit because they knew how, how hard I work at that time for them."
The Colombians were happy to help, Blandon said, and encouraged him to strike out on his own. "When I fight with Norwin, the Colombian people started, you know, pushing me along, trying to cross Norwin, and they go with me and talk to me that I can make it myself." Asking the Colombians for cocaine on credit was not difficult. They were used to working cocaine deals that way. They would give you the cocaine and a few days to sell it. Then you'd pay them what you owed. It was a clever way for the cartels to expand their customer base in the United States and keep their own exposure to a minimum.
The Colombians advanced Blandon fifteen kilos—worth about $885,000— and they were off to the races. He started out getting fifteen kilos a month and within a couple months had progressed to thirty kilos a month. He left Meneses and the Contras behind and concentrated on making money for himself, he said.
But several parts of Blandon's story don't add up. He testified that when he was supplying Henry Corrales in 1983, Ross was already selling up to seven kilos a day, and Blandon said he had other customers as well. If Blandon's testimony about the size of his initial dealings with the Colombians is true, he wouldn't have had enough cocaine to supply Ross for a week, much less a month. Before his purported split from Meneses he had been selling far larger quantities of cocaine than that, he admitted.
"And do you remember if you were getting large amounts or small amounts from Mr. Meneses?" Blandon was asked in 1996.
"At the end, large."
"And what is a large amount?"
"About 40, 50, at this time," he testified.
During his federal grand jury appearance in 1994, Blandon was asked to estimate "how much total you would have gotten from Norwin" during the time he was receiving cocaine from him.
"How many I received from Norwin?"
"Yes."
"Well, it was—I received from him, okay, not for me, because it was—I was only the administrator at that time. I received, in L.A. about 200, 300," he said.
But if Blandon didn't make his first sale until the spring of 1982 and spent a year to eighteen months dealing only ounces and grams, as he testified, it would have been impossible for him to have sold 200 to 300 kilos for Meneses by late 1982 or early 1983, when he claims he broke from him.
In fact, evidence turned up by the FBI and DEA in later years showed that Blandon and Meneses were still working together as late as 1991. In August 1986 Blandon's and Meneses's NADDIS files—computerized intelligence profiles maintained by the federal government on suspected drug traffickers— showed both men as current associates. Moreover, if Blandon double-crossed Meneses in 1982-83 by stealing his sources and his L.A. customers, it is doubtful the men would have remained friends and business partners, yet they continued to operate hotels and other businesses together in Nicaragua.
What appears to have happened is that Blandon acquired additional sources of supply sometime in 1984 and became his own boss in L.A., while Meneses remained in charge of the San Francisco drug operation. And they continued working with each other and with the Contras for years, more or less as equals.
Others who were present at the time confirm that this, in fact, is exactly what occurred. "The principal group is controlled by Blandon and is the focal point for dmg supply and money laundering for the others," an August 1986 DEA report stated. "The other group is run by Meneses and is located principally in the San Francisco area. . .. Per Cl [confidential informant] cocaine is often transported to the Blandon association and then from Blandon to Meneses in San Francisco." That DEA report, based on debriefings of an informant inside Blandon's drug ring, showed Blandon and Meneses working together so closely in mid-1986 that they were sharing the same cocaine supplier and money launderer.
In a 1992 interview with the FBI, Blandon's associate Jacinto Torres told agents that Blandon continued receiving cocaine from Meneses for at least two years longer than Blandon admits. "As of approximately 1984, Blandon was involved in cocaine sales in the Glendale, California area. Blandon's supplier as of 1984 continued to be Norwin Meneses," Torres told the FBI. Torres said Blandon's cocaine business "dramatically increased" in 1984, and that Meneses was flying planeloads of dope in from Miami to keep up with the demand; "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 eventually 'separated' from Meneses and obtained other sources of supply."
A 1990 DEA report, requesting the formation of a multi-agency task force targeting Blandon and Meneses, shows that the DEA also believed the two "disassociated" from each other in 1984 but had, by the late 1980s, reunited to head "a criminal organization that operate(s) internationally from Colombia and Bolivia, through the Bahamas, Costa Rica, or Nicaragua to the United States." The report claimed their drug ring was getting its cocaine from the politically connected Suarez family in Bolivia, and the Ochoa family in Medellin, Colombia, the founders of the notorious Medellin cartel. The Bolivian cocaine was coming into Miami, the report said, and the Colombians' powder was landing in L.A.
The DEA reported that Meneses had given Blandon his start in Los Angeles in the early 1980s and that from 1982 to 1984 "Blandon had operated directly under Meneses." After that, the DEA said, Blandon "began to work as an independent drug distributor with several subordinates working directly for Blandon."
That Blandon continued dealing with Meneses through 1984 was unwittingly confirmed by the Los Angeles Times in a 1996 story that attempted to demonstrate that Blandon and Meneses had split in 1982. The Times claimed to have interviewed an unnamed "cocaine trafficking associate" of Blandon, who said he was present at Meneses's house in the Bay Area on a day when Meneses and Blandon were celebrating the consummation of a big drug deal. "Danilo and Norwin had done some business," the Times quoted the associate as saying. "The deal involved 40 or 50 kilos. The money was all divvied up. There was cash all over the place. Norwin had steaks on the grill. It was going to be a big party."
The phone rang, and Meneses's girlfriend, Blanca Margarita Castano, answered it and then shrieked, "'Jairo's been arrested!' Well, everybody cleared out in a heartbeat. They grabbed the money and ran. ... I don't think anyone turned off the steaks."
Records show Jairo Meneses was arrested on November 26, 1984, roughly two years after Blandon claims he quit dealing with Norwin. San Francisco cocaine dealer Rafael Cornejo, a longtime wholesaler for Meneses, also confirmed that Blandon and Meneses were still working together then. "I didn't see him a lot, but I know he was with Norwin in ’84," Cornejo said. Blandon and Meneses had paid him a memorable visit in San Francisco that year, stopping by a commercial building Cornejo owned on Chenery Street. Norwin wanted to store something in his building, and Cornejo didn't ask what. "It didn't matter to me. You know, if Norwin wants to do something. . .1 said, 'Anything you want.' I like Norwin, I respect Norwin."
During that visit, Cornejo said, "Blandon starts telling me he'd been doing lots of things with the black people down there [in L.A.]. And I said, 'Yeah, so?' And he wanted to see if I was interested in doing something up here. And I said, 'Why?' And he said I should get into the black thing. No one cares about them, he tells me. When they start killing themselves no one cares." Cornejo told Blandon "not to play me with that race thing. Business is business, but don't play me with that race thing. The difference between him and me was that I grew up in San Francisco and it didn't mean that much to us. But he grew up in Nicaragua, with these rich and powerful people, and that's the way he thought."
Blandon's own experience had taught him that no one cared about the cocaine that he was pouring into South Central in 1984. By then, he'd been dealing ever- increasing amounts to Ricky Ross for two years and had received no interference from the police whatsoever. The only media in L.A. that seemed alarmed by the spread of crack in black neighborhoods was the African-American press. The white newspapers didn't even know what crack was.
In December 1983, for instance, former L.A. Dodger legend Maury Wills was arrested for driving a stolen car. The Los Angeles Herald-Examiner noted that the "arresting officers also found a small vial on the automobile's front seat containing a white, rock-like substance believed to be cocaine. Police said a clear glass water pipe was found next to the vial." An LAPD officer "refused to speculate if the water pipe may have been used for free-basing, a technique in which cocaine is smoked to intensify the high." The story said Wills was "booked on the grand theft auto allegation pending further identification of the white substance by the LAPD's narcotics laboratory."
Starting in 1984, unlike what they'd been seeing one or two years earlier, street cops like Steve Polak were arresting low-level dealers in South Central with more cocaine than they had ever seen before. The patrolmen were reporting their finds to the LAPD's Major Violators Unit but were getting nowhere, said Polak, who was one of the LAPD's crack experts and lectured police departments around the country. "A lot of detectives, a lot of cops, were saying to them, 'Hey, these blacks, no longer are we just seeing gram dealers. These guys are doing ounces, they were doing keys.'" The Major Violators Unit, which dealt primarily with Colombians and South Americans, found such reports hard to swallow. "They were saying, basically, 'Ahh, South Central, how much could they be dealing?"' Polak laughed. "'The money's not there. We're not going to bring in millions of dollars in seizures or large quantities of coke down there.'" As a result, the crack dealers of South Central "virtually went untouched for a long time. They enjoyed quite a run there without anyone ever working them."
The same could not be said for the Meneses organization in San Francisco. Since 1981, it had been under constant investigation by the DEA, the FBI, and the California Bureau of Narcotics Enforcement (BNE). But aside from a couple of nickel-and-dime busts of Norwin's nephews, nothing much happened.
"Norwin was a target of ours, and his organization was one that we'd worked on," said Jerry Smith, former head of the BNE's San Francisco bureau. But Smith said Meneses's network was so tight-knit that it was impossible to get anyone inside. The Meneses organization, one federal prosecutor wrote in 1993, had been "the target of unsuccessful investigative attempts for many years."
Meneses, on the other hand, seemed to have much better luck at infiltration than the police.
"There were some things that happened and I'm really kind of reluctant to go into that particular thing," Smith said. "It had nothing to do with the CIA or the FBI. It had to do with one of my guys, who subsequently was fired. . .1 think he was trying to broker some information to somebody for some money. And we got onto it very quickly and so he's no longer around, and I don't think anything ever came to fruition. But it was something that bothered us at the time."
Meneses, in an interview, boasted that he had a DEA agent on his payroll who was feeding him information about the government's many investigations, allowing him to stay one step ahead of the law.
Even if that's true, however, it does not fully explain the drug lord's complete imperviousness to prosecution. It's hard to imagine how one or two corrupt narcotics agents could have held off the entire U.S. law enforcement community, especially when the DEA and FBI had been aware of Norwin's criminal activities since the 1970s. It becomes even harder to fathom given the events that would unfold in late 1984.
"Oh, he [Meneses] was totally protected by the U.S. government," insisted Contra supporter Dennis Ainsworth, a former San Francisco—area economics professor. "He was protected by everyone under the sun."
That conclusion had been a difficult and painful one for Ainsworth to reach. A staunch conservative and Republican party stalwart, the tall, patrician Ainsworth had believed in the Contras, and threw himself wholeheartedly into their cause starting in late 1983, when he became involved in efforts to assist Nicaraguan refugees who had settled in San Francisco after fleeing the Sandinistas. The Nicaraguans, he said, most of whom had been Somoza supporters, had difficulty getting help from the liberal churches in San Francisco, which Ainsworth claimed were interested only in assisting refugees from right- wing Central American dictatorships. "All of a sudden, bang, we've got a problem in our backyard, and nobody wanted to help them," Ainsworth recalled. "And so, I met some of the Nicaraguans and we started helping. Getting clothing donations and stuff like that."
In February 1984, Ainsworth said, he saw an announcement in the San Francisco Chronicle about a seminar at the Sir Francis Drake Hotel concerning Central America and the Contras. He attended and met Julio Bonilla, a Nicaraguan who was the local coordinator of the FDN. The men chatted briefly and exchanged phone numbers. (According to one published source, Norwin Meneses helped finance that seminar at the Drake.) About three weeks later, Ainsworth said, Bonilla called him and invited him to an informal gathering at a house on Colon Avenue in San Francisco, to meet with some of the Nicaraguans who had helped put the seminar together. Ainsworth found a pleasant group of middle-class husbands and wives, many of them recent immigrants. One, he said, had been Anastasio Somoza's dentist. Their leader was a jovial pharmaceutical salesman, Don Sinicco, known to others in the trade as "Mr. Maalox" because he sold the popular antacid to local hospitals. Sinicco was not Nicaraguan; he was born in Italy and lived there until 1938, when Mussolini came to power. He later married a Nicaraguan, Nydia Gonzales, the daughter of a powerful Nicaraguan general, Fernando Gonzales. Through them, he became fascinated with Nicaraguan politics.
As the covert war in Nicaragua escalated, stories about the conflict began popping up in San Francisco's newspapers, and Sinicco read them avidly, but not happily. He believed the press was cheerleading for the Sandinistas, and he fired off dozens letters to the newspapers, chiding them for their "slant." Many were published. "I got a reputation," he said proudly.
In late 1983, Sinicco said, he got a call from a man named Adolfo Calero, the head of the political wing of the FDN. Sinicco said Calero called him because of his letter-writing campaign, which flattered him considerably. "He said, 'We need someone like you to help us get the word out. People will listen to you because you're an American.' So they contacted me, and I said that's fine." At Calero's suggestion, Sinicco formed a small organization called United Support Against Communism in the Americas (US AC A), and he and his friends began holding regular meetings, casting about for ways to publicize the Contras' plight.
Sinicco said he'd never met Calero before, but his wife and Calero's wife were old friends. In Managua, Calero had been a well-known businessman, a Chamber of Commerce type who'd run the bottling plant for the local Coca-Cola distributorship. He was also a CIA asset, someone the U.S. government had hoped might replace Somoza as Nicaragua's president before the Sandinista takeover. According to former FDN director Edgar Chamorro, Calero "had been working for the CIA in Nicaragua for a long time. He served as, among other things, a conduit of funds from the United States Embassy to various student and labor organizations." In early 1983 the CIA had brought Calero out of Nicaragua and installed him as the political director of the FDN; his broad, acne-scarred visage soon became the most familiar face of the Contra rebels in the United States. Tall and imposing, Calero spoke English well, not surprisingly for a graduate of Notre Dame University in South Bend, Indiana. "Calero and Bermudez were our main links with the CIA," Chamorro declared. "They met constantly with the CIA station chief."
In 1984 Calero began visiting San Francisco frequently, Ainsworth and Sinicco said, and would usually stay at their homes while in the city attending to FDN business. While finding Calero personable and smooth, Ainsworth was dismayed by the lack of political sophistication displayed by the FDN support group Sinicco had assembled at Calero's request. The Nicaraguans were eager and committed to the Contra cause, Ainsworth recalled, but there wasn't a soul among them who knew anything about working the American political system. "That little group that used to meet at his house. . .would have done nothing if I hadn't come over and said, 'Look, I'll set these things up.' All Sinicco and his friends were thinking of doing was writing a few letters to the editor. They had no connections whatsoever. And I happened to walk in and I was a well- connected guy."
Ainsworth gently suggested to the Nicaraguans that there were other ways of drawing attention to their cause. Why not sponsor a speaking tour for some Contra officials, such as Adolfo Calero? Bring him to town, show him around, get some press coverage. Sinicco, who was USACA's president, said he and his friends were "very impressed" with Ainsworth's ideas and his political connections and voted to make him a director of their new group. "As far as I knew, he was presumably very active in Republican politics. He knew senators, he knew representatives, both federal and in Sacramento. He knew the chairman of the party. He seemed to be influential and was active internationally in anti¬ communist efforts," Sinicco said. Ainsworth, he said, began opening doors all across San Francisco. "He was the one who appeared to be able to get us these bookings at places like the Olympic Club, the Commonwealth Club. None of us belonged to those kind of places. But he either did or knew people that did. He was able to devote his full-time attention to the group. Most of the rest of us were working men. We had businesses to run, jobs to go to."
On June 4, 1984, Ainsworth arranged a private reception for Calero at the exclusive St. Francis Yacht Club in San Francisco with about sixty of the city's most influential business leaders and Republicans. "It was just a chance for everybody to meet and greet. It wasn't a fund-raiser. Calero was in the news, he was a newsmaker, and some people I knew had expressed an interest in meeting him," Ainsworth said. Calero gave a short speech, answered a few questions, and mingled. "The cocktail party went very smoothly," Ainsworth would later tell the FBI.
Afterward, Calero, Ainsworth, Sinicco, and about twenty others drove over to Caesar's Italian Restaurant, one of the many near Fisherman's Wharf. When the bill came, Ainsworth said, a small neatly dressed man he had not noticed before called the waiter over and picked up the tab for the entire party. Ainsworth leaned over and asked a Nicaraguan friend who Mr. Generosity was. "You don't want to know," was the response he said he got.
Sinicco said he initially assumed one of the Mendoza brothers—two strident Cuban anti-Communists who were members of US AC A—had paid the bill. "When we called for the check, we were told it had been taken care of, and I thought it was one of the Cubans who'd paid for it. I thought Max [Mendozaj's brother had paid for the dinner, and in fact I went up and thanked him afterwards and I'm sure he wonders to this day what I was thanking him for." Before the evening was over, Sinicco was set straight by another Nicaraguan: the big spender was named Norwin Meneses. He owned a restaurant and a travel agency in the Mission District. "I'd never heard of him," Sinicco said, "but we were glad for the financial assistance."
At the end of the dinner, Ainsworth stood and announced that in two days, Don Sinicco was going to be hosting a cocktail party for their esteemed guest, Adolfo Calero, and that everyone in the room was invited.
At the party two days later, Norwin Meneses came in with the crowd dressed in an expensive white linen sports coat with a cashmere overcoat draped over his arm. Sinicco said Meneses spoke to Calero briefly, and the two men retired to a back bedroom, apparently for a meeting. Ainsworth confirmed that. Calero has said he never met privately with Meneses.
Later, as the party was winding down, Sinicco got out his Instamatic camera and began snapping pictures of the historic occasion. He got a shot of some of the wives posing behind a handmade cloth map of Nicaragua. He snapped one of Max Mendoza, the Cuban, with a big grin on his mustachioed face. Sinicco found Calero in the kitchen, huddled by the refrigerator with Meneses, San Francisco FDN coordinator Julio Bonilla, and some other local FDN officials. He told the group to smile and lined up the shot, but just as he snapped the shutter, Meneses closed his eyes and turned away. "Let me get another real quick," Sinicco said. This time Meneses kept his eyes open, but he didn't smile. He looked at Sinicco and glared. Calero posed with a tight smile on his face.
Sinicco suddenly remembered Meneses from the restaurant two nights earlier, and he approached him and thanked him for his kindness. "I told him that now that he knew where we lived, he should come to our next [US AC A] meeting and he said that he would, but that he really needed to leave now."
After that Meneses began attending USACA's meetings, Sinicco recalled, usually arriving with the Mendoza brothers, who ran a Cuban anti-Communist group in San Francisco. Ainsworth said he did not believe there was a connection between Meneses and the Cubans, other than a political one. However, a former FDN mercenary from Florida, Jack Terrell, said Meneses was plugged tightlyy into the Cuban exile community in Miami. "He assisted the Cuban Legion in their radio propaganda shows coming from Miami," Terrell said, adding that Meneses was an associate of several members of the 2506 Brigade, which was made up of Bay of Pigs veterans.
Sinicco showed the author attendance records, minutes of meetings, and other assorted paperwork he kept as USACA's president. One of the documents he provided was a handwritten note that he said were his talking points for one of USACA's earliest meetings. "Our first time venture as USACA has proven highly successful," Sinicco had written, and he listed "seven successes." The first was that "Adolfo was brought over."
Success No. 6: "We are receiving some attention from some Cuban people who appear eager to help."
Success No. 7: "Mr. Meneces' [sic] contribution." Meneses dropped a $160 contribution on the little group one night, Sinicco said, and picked up another dinner for $324.20.
According to Sinicco's files, another founding member of USACA was Father Thomas F. Dowling, a San Franciscan whom Sinicco said was "some kind of a priest." Though he sometimes passed himself off as a Roman Catholic priest, Dowling was an ordained member of a tiny splinter church called the North American Old Roman Catholic Church of the Utrecht Succession, a church whose legitimacy is a matter of some debate. While working with USACA and the Contras, Dowling appeared before Congress in 1985 sporting a clerical collar and identifying himself as a Catholic priest, to testify as a purported witness to Sandinista atrocities. His appearance had been arranged by the State Department's Office of Public Diplomacy for Latin America, later described by congressional investigators as an illegal CIA-run domestic propaganda mill.
"Senior CIA officials with backgrounds in covert operations, as well as military intelligence and psychological operations specialists from the Department of Defense, were deeply involved in establishing and participating in a domestic political and propaganda operation run through an obscure bureau in the Department of State," a 1992 House committee staff report concluded. "Almost all of these activities were hidden from public view and many of the individuals involved were never questioned or interviewed by the Iran/Contra committees."
Through that office, the CIA and the National Security Council engaged in "a domestic, covert operation designed to lobby the Congress, manipulate the media and influence domestic public opinion," the report said, echoing a 1987 investigation by the Comptroller General of the United States, which said the State Department had engaged in "prohibited, covert propaganda activities."
Dowling later admitted receiving about $73,000 in cash and travelers checks from Oliver North, CIA agent Adolfo Calero and other members of North's operation between 1986 and 1987 "to affect public opinion favorably toward the Reagan position inside, regarding Central America." Dowling testified that the money went to a non-profit organization he'd set up in San Francisco called the Latin America Strategic Studies Institute (LASSI). In addition to Dowling, LAS SI employed a recently retired CIA officer with extensive Latin American experience, G. James Quesada, a Nicaraguan who lived in the San Francisco area. "I met [Quesada] when I spoke before the retired group of intelligence officers a few years back," Dowling testified in 1987.
Quesada confirmed that he worked with Dowling but said he did so as private citizen, not for the CIA. "I know nobody thinks a CIA agent ever retires, but I really did retire," he said in an interview, with a laugh. Quesada also met Norwin Meneses and Danilo Blandon at an FDN meeting, and instantly, he said, his antennae went up. "I found out what Meneses was pretty quickly, but he was not involved in our side of things, which was the political side," Quesada said. Meneses and Blandon had something to do with "the other side," meaning the military part of the Contra operation. "As I recall, Blandon was looking for medical students or was recruiting medical students to go down to Honduras. I stayed away from both of them."
In addition to his work with Oliver North and the San Francisco FDN, Father Dowling was also heavily involved with CAUSA, a conservative political organization that was part of the Rev. Sun-Myung Moon's Unification Church. During the time of the CIA funding cutoff, Moon's organization—which was linked in the 1970s to the Korean Central Intelligence Agency—stepped in and began funneling money and supplies to the Contras. Dowling was a member of CAUSA's national advisory board and a frequent speaker at CAUSA rallies and conferences. Among the documents US AC A founder Sinicco showed the author was an August 1984 letter from CAUSA's president, retired air force general E. D. Woellner, thanking Sinicco's organization for attending the annual CAUSA convention and suggesting that the groups work more closely in the future.
Though the combination of fringe religions and the Contras may seem strange, partly declassified CIA records show that the agency had evidence as far back as 1982 that there were unwholesome connections between Meneses's drug ring, the FDN, and an unnamed religious organization in the United States. According to a 1998 CIA Inspector General's report, the CIA's Domestic Collection Division picked up word in October 1982 that "there are indications of links between (a U.S. religious organization) and two Nicaraguan counter-revolutionary groups." The heavily censored CIA cable said, "These links involve an exchange in [the United States] of narcotics for arms."
The CIA's domestic spies reported that "there was to be a meeting among the participants in Costa Rica regarding this exchange" and that two U.S. law enforcement agencies were aware of it. Though the agencies were not named in the censored CIA cable, the FBI had the Meneses organization under investigation at the time and had learned through wiretaps that Norwin's Costa Rican Contra associates—Horacio Pereira, Troilo Sanchez, and Fernando Sanchez—were shipping cocaine to San Francisco.
CIA headquarters ordered its domestic agents to get more information about the upcoming meeting in Costa Rica, and a few days later another cable arrived at Langley with additional details. "The attendees at the meeting would include representatives from the FDN and UDN, and several unidentified U.S. citizens," the CIA cable reported. It "identified Renato Pena as one of four persons—along with three unidentified U.S. citizens—who would represent the FDN at the Costa Rica meeting."
Renato Pena Cabrera was one of Norwin Meneses's San Francisco drug dealers and a friend of Dennis Ainsworth. Pena was dating Danilo Blandon's sister, Leysla, and was a top official in the San Francisco FDN. Pena told CIA investigators that he met Meneses in 1982 at an FDN meeting and served as an official representative of the FDN's political wing in northern California from 1982 until mid-1984. After that, he said, he "was appointed to be the military representative of the FDN in San Francisco, in part because of Norwin Meneses' close relationship with [Enrique] Bermudez."
Pena said Norwin introduced him to his nephew, Jairo, who was in charge of distributing the family's cocaine to other dealers. Soon, the young Contra found himself hauling cash and drugs up and down the freeways of the Golden State. "Pena says he made from six to eight trips from San Francisco to Los Angeles between 1982 and 1984 for Meneses' drug trafficking organization," the CIA Inspector General reported. "Each time, he says, he carried anywhere from $600,000 to $1,000,000 to Los Angeles and returned to San Francisco with six to eight kilograms of cocaine. Pena says that a Colombian associate of Meneses told Pena in general terms that a portion of the proceeds from the sale of the cocaine Pena brought to San Francisco were going to the Contras."
Even with the inflated cocaine prices of the early 1980s, the amount of money Pena was taking to L.A. was far more than was needed to pay for six to eight kilos of cocaine. It seems likely that the excess—$300,000 to $500,000 per trip—was the Contras' cut of the drug proceeds.
When the information about Renato Pena's involvement in the upcoming Costa Rican meeting was relayed back to Langley, CIA headquarters immediately ordered the Domestic Collection Division to halt any further investigation, allegedly because "of the apparent participation of U.S. citizens." But the agency began having second thoughts about sitting on the information. On November 17, 1982, Langley worriedly cabled one of its stations in Latin America to tell its agents that while headquarters didn't think the reports about the Contras and drugs were true, "the information was surfaced by another [U.S. government] agency and may return to haunt us. Feel we must try to confirm or refute the information if possible." Langley wanted to know if Contra leaders had "scheduled any meeting in the next few weeks? If so, what information do you have regarding the attendees?"
The response was probably not what CIA headquarters wanted to hear. "Several Contra officials had recently gone to the United States for a series of meetings, including a meeting with Contra supporters in San Francisco," the Central American CIA station reported back. (It was during October 1982 that FDN leaders met with Meneses in L.A. and San Francisco in an effort to set up local Contra support groups in those cities.)
The CIA Inspector General's report is silent about what, if anything, the agency did next. Pena told CIA inspectors that the unnamed U.S. religious organization mentioned in the CIA cables "was an FDN political ally that provided only humanitarian aid to Nicaraguan refugees and logistical support for Contra-related rallies, such as printing services and portable stages."
When Renato Pena and Meneses's nephew Jairo were arrested on cocaine trafficking charges in November 1984, Ainsworth began suspecting that the FDN was also involved in drug trafficking. "Renato wasn't a drug dealer," Ainsworth said. "He was a Contra and he was duped. When Congress cut off aid in the fall of 1983, these guys had nowhere else to turn and they wanted to get their country back. And once you say I'll do anything to get my country back, then they were easy prey for Meneses, who said, 'Hey, you do this for me and I'll help you guys out.'"
Agents found a kilo of cocaine in the trunk of Pena's car. At an apartment Jairo Meneses maintained in Oakland as a cocaine storehouse, the DEA found half a kilo in a safe. Because the evidence against him was so overwhelming— hand-to-hand sales to DEA agents and a kilo in his car—Pena pleaded guilty to one count of possession of cocaine with intent to sell in March 1985. He also agreed to help the government prosecute Jairo Meneses, and was given a two- year sentence in return.
As part of his deal with the government, Renato Pena was extensively debriefed by the DEA and his interviews were nothing short of astonishing— which is probably why they remained sealed for 15 years.
"When debriefed by the DEA in the early 1980s, Pena said that the CIA was allowing the Contras to fly drugs into the United States, sell them, and keep the proceeds," the Justice Department Inspector General reported in 1997. Jairo Meneses had told him that "the United States was aware of these dealings and that it was highly unlikely that I would even get in trouble." Both Norwin Meneses and Blandon told him they were raising money for the Contras through drug dealing; Blandon had even claimed "the Contras would not have been able to operate without drug proceeds."
Further, FDN leader Enrique Bermudez "was aware of the drug dealing" and Pena described Bermudez as "a CIA agent." When challenged by CIA questioners on that statement, Pena merely laughed. "It's very obvious," he said: Bermudez had been Somoza's military attache in Washington and it was common knowledge in Nicaragua that anyone who had that job under Somoza also worked for the CIA. (Bermudez, in fact, was on the CIA's payroll from 1980 to 1991, which means at the least that he was a contract agent, if not an agency officer.)
As if Pena's testimony wasn't convincing enough, the DEA obtained independent corroboration in the spring of 1986 from a longtime informant who'd known Meneses since childhood described by the DEA as "extremely reliable." He told a DEA intelligence analyst that Meneses was indeed part of the FDN and had been using drug money to buy weapons for the Contras. He also vouched for Renato Pena's credibility: "Renato Pena worked for Jairo Meneses and ran the San Francisco office of the FDN," the informant explained. "Pena was one of the major Contra fund raisers in San Francisco and was one of those responsible for sending Meneses' drug proceeds to the Contras."
In interview years later with inspectors from the CIA and the Justice Department, Pena defiantly stood his ground, even though he was under threat of immediate deportation. He insisted that "the CIA knows about all these things. . .The money the Contras received from the Reagan Administration was peanuts and the growing military organization needed supplies, arms, food, and money to support the families of the Contras. The CIA decided to recruit Meneses so that dmg sales could be used to support the Contras. Bermudez could not have recruited Meneses on his own. . .but would have had to follow orders."
Ainsworth said Pena was devastated by his arrest and confessed to him his role in the Contra drug network. Alarmed, Ainsworth began looking into the relationship between the FDN and drugs. He made "inquiries in the local San Francisco Nicaraguan community and wondered among his acquaintances what Adolfo Calero and other people in the FDN movement were doing and the word that he received back is that they were probably engaged in cocaine smuggling," Ainsworth later told the FBI.
During one of Ainsworth's trips to Washington in 1985, he said, "I went to see some friends of mine and started asking some questions." One friend slipped Ainsworth a copy of a Drug Enforcement Administration intelligence report dated February 6, 1984. The DEA report, prepared by agent Sandalio Gonzalez in San Jose, Costa Rica, told of the results of a debriefing of a confidential informant. Ainsworth's heart sank as he read it. The informant "related that Norwin Meneses Cantarero, Edmundo's younger brother, was presently residing in San Jose, Costa Rica, and is the apparent head of a criminal organization responsible for smuggling kilogram quantities of cocaine to the United States." The discovery left Ainsworth reeling: "I had gone through the Looking Glass. I had crossed over into the nether world that 99 percent of the population wouldn't even believe existed."
In September 1985 Ainsworth was contacted by a U.S. Customs Service official who was "investigating the Nicaraguan role in a large narcotics ring extending from Miami, Florida to Texas and California." The Customs agent wanted to ask Ainsworth about the FDN. "During the contact, [name deleted] complained to Ainsworth that national security interests kept him from making good narcotics cases and he acted frustrated at this chain of events," Ainsworth would later tell the FBI. "According to [name deleted] two U.S. Customs Service officers who felt threatened and intimidated by National Security interference in legitimate narcotics smuggling investigations had resigned and had assumed false identities." The FBI report went on to say that the Customs agent "told Ainsworth that Norwin Meneses would have been arrested in a major drug case in 1983 or 1984 except that he had been warned by a corrupt [information deleted] officer."
Other law enforcement sources told Ainsworth "they had a file on Meneses that was two feet thick. I thought this bastard should have been arrested. I assumed there would be an outstanding warrant on this guy. I was amazed. There wasn't a single outstanding warrant on Meneses. Not one. They had no interest in him whatsoever. Here you had a major cocaine trafficker who was deeply involved with the Contras, and apparently, everyone but me knew about it. After I broke with Calero, I found out Calero and Meneses were very good friends."
Calero has admitted meeting with Meneses on at least six occasions in San Francisco, but he has portrayed them as simple greetings during large public gatherings. He has repeatedly denied knowing Meneses was a drug trafficker, yet he admitted to a Costa Rican paper in 1986 that he knew Meneses was "involved in some illegal things, but I don't know anything."
USACA president Don Sinicco said he never suspected Norwin Meneses was involved in criminal activities, but he confirmed that Ainsworth began muttering about it. "What always bothered me about [Dennis] is that towards the end, I don't know what, he seemed to get disillusioned or disgusted with Calero. Dennis got disillusioned about something," Sinicco said.
Ainsworth's disillusionment caused him to quit working with the Contras and seek out the FBI. In early 1987, records show, during his first meeting with FBI agents, Ainsworth warned them that the FDN "has become more involved in selling arms and cocaine for personal gain than in a military effort to overthrow the current Nicaraguan Sandinista government." He told the agents about Norwin Meneses and Renato Pena, about Tom Dowling and Oliver North, and about North's illegal Contra support network in the U.S. and Central America. Much of the information Ainsworth gave the FBI and, later, Iran-Contra prosecutor Lawrence Walsh's staff about the inner workings of the FDN and the relationships between Contra leaders and U.S. government officials was corroborated during the congressional Iran-Contra investigations.
Ainsworth was also getting death threats, he told the FBI, but the agents seemed unimpressed. "He had no information to substantiate this alleged threat," they wrote. Ainsworth never heard from them again. "I mean, here I am as a citizen, I complained to the FBI and they tell me they have no interest in the case. Then I call Walsh's people up and they sent a couple FBI guys out to talk to me and they have no interest in it. I couldn't find anyone who was interested in this. And I made a legitimate effort. And people were like, 'Den, leave this alone. Just leave it alone,"' Ainsworth remembered. "I thought I was part of the establishment. And all of a sudden I was a leper." Frightened and heartsick, Ainsworth fled California for the East Coast, where he went into semiseclusion.
Meanwhile, the narcotics investigation that began with the arrests of Renato Pena and Jairo Meneses seemed to fall into a black hole. The case federal prosecutors had assembled against the drug kingpin's nephew was a slam-dunk. They'd found cocaine in Jairo's apartment; his codefendant had cut a deal and was prepared to testify for the government. If convicted of the charges against him—one count of conspiracy to distribute cocaine and six counts of possession with intent to distribute—Jairo Meneses would spend the next fifteen years in the federal pen. His decision to plead guilty and rat out Uncle Norwin could hardly be considered a surprise.
Like Pena, Jairo Meneses was debriefed by the DEA and he, too, implicated the Contras in Norwin's drug sales, confirming that his uncle had direct dealings with both Blandon and FDN commander Enrique Bermudez. But his admissions in court were limited to the bookkeeping work he'd done for Norwin in San Francisco; he never breathed a word in public about the Contras.
Were these men telling the truth? If one looks at the outcome of their criminal cases, the inescapable conclusion is that they were. Inventing stories about Contra drug trafficking was not the usual way admitted dope dealers ingratiated themselves with Ed Meese and his hypersensitive Justice Department. But despite being caught red-handed with pounds of cocaine, they were neither sent to jail nor deported. They got probation and a work-furlough job and kept their mouths shut, which suggests that the Justice Department found them entirely too believable.
In an interview with a Costa Rican paper in 1986, Meneses scoffed at his nephew's testimony. Jairo had made it up, Norwin declared, because he'd refused to bail the boy out when he'd gotten arrested. "If Jairo supposedly was my accountant, like he says, I would have been interested in taking him out of jail because he would have had me by the tail," Meneses told La Nacion. "Isn't that logical?" (Norwin didn't mention that Jairo's bail was paid by Danilo Blandon's sister, Leysla Balladares, who also bailed out Pena, her boyfriend.) "Besides," Norwin added, "I remained in San Francisco. I have never hidden. There's never been a warrant for my arrest. I have not changed passports. That I directed a dmg trafficking organization is totally false."
Some of Meneses's assertions were indeed irrefutable. With the testimony of Jairo Meneses and Renato Pena, and the stacks of other evidence the police had compiled against him over the years, it would have been a relatively easy matter to have convicted the drug lord on any number of trafficking and conspiracy charges. Many dopers have gone to jail on much less evidence. At a minimum, the government could have deported him as an undesirable alien and banned him forever from the United States; he was, after all, living in the United States as a guest of the government—a political refugee.
But it didn't happen. Nothing happened. Norwin Meneses continued living as a free man, crisscrossing U.S. borders with impunity, dealing cocaine and sending supplies to the Contras. And his relationship with the U.S. government grew even closer.
Barely a year had passed since the CIA had taken over the financing of the Contras, and already the covert war was no longer a secret. The week before the 1982 elections, Newsweek magazine published the first detailed account of the Reagan administration's support of the Contras: "America's Secret War: Target Nicaragua." The cover story portrayed the Contras—whose forces had built up to around 4,000 men by this point—as being in a position to overthrow the Sandinistas. There were full-color photographs of paratroopers dropping from the sky, which made it appear as if the invasion was already under way.
But that was a gross exaggeration of reality. The Contras, in truth, had just started receiving the American weapons and supplies that Reagan had promised them a year earlier. According to one account, the main source for Newsweek 's story was none other than CIA director William Casey, who wanted to ensure that the Contra project didn't get shelved. Now that it was public knowledge that the Reagan administration was helping the Contras, Casey's reasoning went, it would look like a sellout—another Bay of Pigs—if it stopped.
The reporting incensed some members of Congress, particularly those who had been told by CIA officials that the Contras were merely border guards, keeping the Sandinistas from sending arms into El Salvador. The Contras' first major act of war, in fact, had nothing to do with El Salvador. Under CIA direction, two bridges linking Honduras and Nicaragua were blown up in March 1982, an operation Contra commanders considered to be the opening shots of the war.
In response to the Newsweek report, Congressman Tom Harkin proposed a complete cutoff of funding for all paramilitary activities against the Nicaraguan government. The fact that the war was illegal, Harkin argued, was nothing compared to the U.S. government cozying up to "perhaps the most hated group of Nicaraguans that could exist outside the borders of Nicaragua, and I talk about the Somocistas." Harkin called them "vicious, cutthroat murderers" and urged Congress to "end our involvement with this group."
When the Reagan administration heard about Harkin's proposed amendment to the annual defense budget bill, Oliver North later wrote, it "hit the roof. . .. The President let it be known that if Congress approved the Harkin Amendment, which was unlikely anyway, he would promptly veto it." Instead, Congress passed the first Boland Amendment, named for the Massachusetts Democrat, Edward P. Boland, who authored it. Boland, a member of the House Intelligence Committee, knew full well that the CIA was funding the Contras, and he was not opposed to it. But Harkin's move—making a public issue out of a secret CIA project—had put Boland on the spot and riled up other liberals. Boland told Harkin that Congress had no business passing laws like the one he was proposing. That's why there was an Intelligence Committee, Boland lectured, "to keep the nation's secrets and exercise sensible and prudent oversight." The Intelligence Committee, a body generally protective of the CIA, had been one of the few committees told of the secret Contra project.
To quiet Harkin and other liberals, Boland agreed to an amendment that prohibited the use of taxpayer funds "for the purpose of overthrowing the government of Nicaragua or provoking a military exchange between Nicaragua and Honduras." The House passed it on Christmas Eve 1982 by a vote of 411-0.
No doubt the lawmakers were eager to get home for the holidays, but the reason the Boland Amendment received unanimous support was because it accomplished nothing. It was largely a fraud, designed to make it look as if Congress was cracking down on the Contra project without actually doing so.
Internal government memos show that the CIA, the White House, the Defense Department, and the Contras' congressional supporters knew that the Contras had no hope of defeating the Sandinistas. Since there was no way in hell the Contras were ever going to overthrow the Nicaraguan government, their supporters reasoned, they could continue spending CIA funds despite the Boland Amendment. If the Contras were given money for one purpose—arms interdiction—and decided to use it another way, well, that wasn't the CIA's fault, was it? The money hadn't been given "for the purpose" of an overthrow.
Indeed, by early 1983, CIA dollars were pouring into Honduras and Costa Rica in torrents. Best of all, the Contras no longer had to ask their Argentine advisers for permission to spend it. Most of the Argentines were called home in 1982 after their country's disastrous war with Great Britain over the Falkland Islands.
Enrique Bermudez and the other top-ranking FDN officials started living like real generals. In Tegucigalpa, Honduras, Bermudez moved into "an elegant two- story place, all dark wood and balconies, overlooking the Tegucigalpa basin from a lovely hillside lot in the exclusive neighborhood of Ciudad Nueva." Bermudez and his staff spent their evenings dining on roasts, puffing cigars, quaffing tequila, or carousing in the excellent casinos downtown. "Bermudez had developed a taste for the teenage girls his men were recruiting in Nicaragua," journalist Sam Dillon wrote in his 1991 book Comandos. "Bermudez was inviting them from the base camps back to Ciudad Nueva, one at a time, to try out as his 'secretaries.'"
Dillon wrote that the CIA was sending "tens of thousands of dollars a month to Bermudez's general staff to pay the 'family aid' salaries of his field commanders, and other prodigious sums to buy food for the thousands of FDN fighters." But much of that aid was being diverted and never reached the soldiers in the field. The Southern Front commanders in Costa Rica, Eden Pastora and "El Negro" Chamorro, constantly complained that Bermudez and his CIA friends were stiffing them on the supplies, raking off the best weapons and the best food and sending them garbage—planeloads of diapers, feminine napkins, and extra- large underwear. It wasn't merely unfair, they argued, it was an insult to their manhood.
"Bermudez's staff officers were pocketing the money," Dillon wrote. "They were also stealing half the CIA's food budget. Though they routinely shipped only half the necessary beans, rice and other foodstuffs to the base camps, they were billing the CIA for full rations."
Several accounts, including Dillon's, paint a picture of massive corruption inside the FDN, perpetuated by Bermudez and his closest associates, death squad leader Ricardo Lau and millionaire land baron Aristides Sanchez. At one point, dozens of midlevel FDN field commanders petitioned to have Bermudez fired for stealing money and squandering supplies. Some CIA field officers were pushing for his removal on the same grounds.
But Bermudez had friends at CIA headquarters at Langley, and after he contacted them about the incipient mutiny, the complainers were the ones booted out of the FDN. The CIA brass felt they couldn't dump "the obedient asset who'd helped construct their entire project," Dillon wrote.
Still, congressional discomfort over the CIA's army was growing. In May the House Intelligence Committee issued a special report suggesting that the "operation is illegal" and that the administration knew plainly that the Contras were trying to overthrow the Nicaraguan government. On July 28, 1983, the House passed a resolution by a 228-195 vote to stop all aid to the Contras. "Opposition in the House to aiding the Nicaraguan rebels seemed almost insurmountable and it would be easier for House Democrats to block passage of a new aid authorization in 1984 than it had been to cut it off in 1983," former State Department official Robert Kagan, a Contra supporter, wrote.
Yet it was somewhere around this time, according to Danilo Blandon, that he stopped sending the profits from his L.A. cocaine sales to the Contras. At other times he has said it was late 1982. In either case, Blandon said that the reason he was given for halting the donations was that the Contras had plenty of money.
"In 1983, okay, the Contra gets a lot of money from the United States," he told a federal grand jury in 1994. "And they were—when Reagan get in the power, Mr. Reagan get in the power, we start receiving a lot of money. And the people that was in charge, it was the CIA, so they didn't want to raise any money because they have, they had the money that they wanted."
"From the government?" Assistant U.S. Attorney David Hall asked.
"Yes, for the Contra revolution."
"Okay."
"So we started—you know, the ambitious person, we started doing business by ourselves," Blandon said.
"To make money for yourselves?"
"Yes."
"There's a lot of money to be made?"
"Yes."
Blandon told CIA inspectors that FDN commander Enrique Bermudez came to California sometime in 1983 and told him personally that it wasn't necessary for the Los Angeles group to raise any more money. "The FDN needed people, not money, because the CIA was providing money," he said Bermudez told them. But Blandon's mentor, Norwin Meneses, said Blandon remained a loyal financial supporter of the Contras for the duration of the war. Asked when Blandon stopped giving the Contras monetary support, Meneses replied, "Never, as far as I know."
Blandon said he was working for Meneses at the time the Contra cocaine kickbacks ended. "I continued working for a period of time, about six months, and then I changed because Meneses was—it was the same thing. I wasn't making any money." Blandon was tired of being stuck in the middle of fights between Norwin and his estranged wife, Maritza. Meneses was still charging him too much for cocaine and was refusing to let him share in the spoils. "When I was with Meneses, you see, I didn't make no money at all," Blandon griped. "Meneses was charging me, you know, a big price, that I couldn't meet. I couldn't make enough money, you know, because all the time I owe him."
Blandon said he owed Meneses around $100,000 and couldn't seem to reduce the debt because "I didn't make any money. So I start looking for my own resource, or my own sources." He found them by going behind Meneses's back and dealing directly with Norwin's L.A. suppliers—a couple of Colombians he knew only as Luis and Tony, to whom he had been delivering cash for his miserly boss. "I used to deliver money to the Colombian connection from Meneses, and I got a friendship with them and they know how hard I was working at that time. It was easy for me to ask them for credit because they knew how, how hard I work at that time for them."
The Colombians were happy to help, Blandon said, and encouraged him to strike out on his own. "When I fight with Norwin, the Colombian people started, you know, pushing me along, trying to cross Norwin, and they go with me and talk to me that I can make it myself." Asking the Colombians for cocaine on credit was not difficult. They were used to working cocaine deals that way. They would give you the cocaine and a few days to sell it. Then you'd pay them what you owed. It was a clever way for the cartels to expand their customer base in the United States and keep their own exposure to a minimum.
The Colombians advanced Blandon fifteen kilos—worth about $885,000— and they were off to the races. He started out getting fifteen kilos a month and within a couple months had progressed to thirty kilos a month. He left Meneses and the Contras behind and concentrated on making money for himself, he said.
But several parts of Blandon's story don't add up. He testified that when he was supplying Henry Corrales in 1983, Ross was already selling up to seven kilos a day, and Blandon said he had other customers as well. If Blandon's testimony about the size of his initial dealings with the Colombians is true, he wouldn't have had enough cocaine to supply Ross for a week, much less a month. Before his purported split from Meneses he had been selling far larger quantities of cocaine than that, he admitted.
"And do you remember if you were getting large amounts or small amounts from Mr. Meneses?" Blandon was asked in 1996.
"At the end, large."
"And what is a large amount?"
"About 40, 50, at this time," he testified.
During his federal grand jury appearance in 1994, Blandon was asked to estimate "how much total you would have gotten from Norwin" during the time he was receiving cocaine from him.
"How many I received from Norwin?"
"Yes."
"Well, it was—I received from him, okay, not for me, because it was—I was only the administrator at that time. I received, in L.A. about 200, 300," he said.
But if Blandon didn't make his first sale until the spring of 1982 and spent a year to eighteen months dealing only ounces and grams, as he testified, it would have been impossible for him to have sold 200 to 300 kilos for Meneses by late 1982 or early 1983, when he claims he broke from him.
In fact, evidence turned up by the FBI and DEA in later years showed that Blandon and Meneses were still working together as late as 1991. In August 1986 Blandon's and Meneses's NADDIS files—computerized intelligence profiles maintained by the federal government on suspected drug traffickers— showed both men as current associates. Moreover, if Blandon double-crossed Meneses in 1982-83 by stealing his sources and his L.A. customers, it is doubtful the men would have remained friends and business partners, yet they continued to operate hotels and other businesses together in Nicaragua.
What appears to have happened is that Blandon acquired additional sources of supply sometime in 1984 and became his own boss in L.A., while Meneses remained in charge of the San Francisco drug operation. And they continued working with each other and with the Contras for years, more or less as equals.
Others who were present at the time confirm that this, in fact, is exactly what occurred. "The principal group is controlled by Blandon and is the focal point for dmg supply and money laundering for the others," an August 1986 DEA report stated. "The other group is run by Meneses and is located principally in the San Francisco area. . .. Per Cl [confidential informant] cocaine is often transported to the Blandon association and then from Blandon to Meneses in San Francisco." That DEA report, based on debriefings of an informant inside Blandon's drug ring, showed Blandon and Meneses working together so closely in mid-1986 that they were sharing the same cocaine supplier and money launderer.
In a 1992 interview with the FBI, Blandon's associate Jacinto Torres told agents that Blandon continued receiving cocaine from Meneses for at least two years longer than Blandon admits. "As of approximately 1984, Blandon was involved in cocaine sales in the Glendale, California area. Blandon's supplier as of 1984 continued to be Norwin Meneses," Torres told the FBI. Torres said Blandon's cocaine business "dramatically increased" in 1984, and that Meneses was flying planeloads of dope in from Miami to keep up with the demand; "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 eventually 'separated' from Meneses and obtained other sources of supply."
A 1990 DEA report, requesting the formation of a multi-agency task force targeting Blandon and Meneses, shows that the DEA also believed the two "disassociated" from each other in 1984 but had, by the late 1980s, reunited to head "a criminal organization that operate(s) internationally from Colombia and Bolivia, through the Bahamas, Costa Rica, or Nicaragua to the United States." The report claimed their drug ring was getting its cocaine from the politically connected Suarez family in Bolivia, and the Ochoa family in Medellin, Colombia, the founders of the notorious Medellin cartel. The Bolivian cocaine was coming into Miami, the report said, and the Colombians' powder was landing in L.A.
The DEA reported that Meneses had given Blandon his start in Los Angeles in the early 1980s and that from 1982 to 1984 "Blandon had operated directly under Meneses." After that, the DEA said, Blandon "began to work as an independent drug distributor with several subordinates working directly for Blandon."
That Blandon continued dealing with Meneses through 1984 was unwittingly confirmed by the Los Angeles Times in a 1996 story that attempted to demonstrate that Blandon and Meneses had split in 1982. The Times claimed to have interviewed an unnamed "cocaine trafficking associate" of Blandon, who said he was present at Meneses's house in the Bay Area on a day when Meneses and Blandon were celebrating the consummation of a big drug deal. "Danilo and Norwin had done some business," the Times quoted the associate as saying. "The deal involved 40 or 50 kilos. The money was all divvied up. There was cash all over the place. Norwin had steaks on the grill. It was going to be a big party."
The phone rang, and Meneses's girlfriend, Blanca Margarita Castano, answered it and then shrieked, "'Jairo's been arrested!' Well, everybody cleared out in a heartbeat. They grabbed the money and ran. ... I don't think anyone turned off the steaks."
Records show Jairo Meneses was arrested on November 26, 1984, roughly two years after Blandon claims he quit dealing with Norwin. San Francisco cocaine dealer Rafael Cornejo, a longtime wholesaler for Meneses, also confirmed that Blandon and Meneses were still working together then. "I didn't see him a lot, but I know he was with Norwin in ’84," Cornejo said. Blandon and Meneses had paid him a memorable visit in San Francisco that year, stopping by a commercial building Cornejo owned on Chenery Street. Norwin wanted to store something in his building, and Cornejo didn't ask what. "It didn't matter to me. You know, if Norwin wants to do something. . .1 said, 'Anything you want.' I like Norwin, I respect Norwin."
During that visit, Cornejo said, "Blandon starts telling me he'd been doing lots of things with the black people down there [in L.A.]. And I said, 'Yeah, so?' And he wanted to see if I was interested in doing something up here. And I said, 'Why?' And he said I should get into the black thing. No one cares about them, he tells me. When they start killing themselves no one cares." Cornejo told Blandon "not to play me with that race thing. Business is business, but don't play me with that race thing. The difference between him and me was that I grew up in San Francisco and it didn't mean that much to us. But he grew up in Nicaragua, with these rich and powerful people, and that's the way he thought."
Blandon's own experience had taught him that no one cared about the cocaine that he was pouring into South Central in 1984. By then, he'd been dealing ever- increasing amounts to Ricky Ross for two years and had received no interference from the police whatsoever. The only media in L.A. that seemed alarmed by the spread of crack in black neighborhoods was the African-American press. The white newspapers didn't even know what crack was.
In December 1983, for instance, former L.A. Dodger legend Maury Wills was arrested for driving a stolen car. The Los Angeles Herald-Examiner noted that the "arresting officers also found a small vial on the automobile's front seat containing a white, rock-like substance believed to be cocaine. Police said a clear glass water pipe was found next to the vial." An LAPD officer "refused to speculate if the water pipe may have been used for free-basing, a technique in which cocaine is smoked to intensify the high." The story said Wills was "booked on the grand theft auto allegation pending further identification of the white substance by the LAPD's narcotics laboratory."
Starting in 1984, unlike what they'd been seeing one or two years earlier, street cops like Steve Polak were arresting low-level dealers in South Central with more cocaine than they had ever seen before. The patrolmen were reporting their finds to the LAPD's Major Violators Unit but were getting nowhere, said Polak, who was one of the LAPD's crack experts and lectured police departments around the country. "A lot of detectives, a lot of cops, were saying to them, 'Hey, these blacks, no longer are we just seeing gram dealers. These guys are doing ounces, they were doing keys.'" The Major Violators Unit, which dealt primarily with Colombians and South Americans, found such reports hard to swallow. "They were saying, basically, 'Ahh, South Central, how much could they be dealing?"' Polak laughed. "'The money's not there. We're not going to bring in millions of dollars in seizures or large quantities of coke down there.'" As a result, the crack dealers of South Central "virtually went untouched for a long time. They enjoyed quite a run there without anyone ever working them."
The same could not be said for the Meneses organization in San Francisco. Since 1981, it had been under constant investigation by the DEA, the FBI, and the California Bureau of Narcotics Enforcement (BNE). But aside from a couple of nickel-and-dime busts of Norwin's nephews, nothing much happened.
"Norwin was a target of ours, and his organization was one that we'd worked on," said Jerry Smith, former head of the BNE's San Francisco bureau. But Smith said Meneses's network was so tight-knit that it was impossible to get anyone inside. The Meneses organization, one federal prosecutor wrote in 1993, had been "the target of unsuccessful investigative attempts for many years."
Meneses, on the other hand, seemed to have much better luck at infiltration than the police.
"There were some things that happened and I'm really kind of reluctant to go into that particular thing," Smith said. "It had nothing to do with the CIA or the FBI. It had to do with one of my guys, who subsequently was fired. . .1 think he was trying to broker some information to somebody for some money. And we got onto it very quickly and so he's no longer around, and I don't think anything ever came to fruition. But it was something that bothered us at the time."
Meneses, in an interview, boasted that he had a DEA agent on his payroll who was feeding him information about the government's many investigations, allowing him to stay one step ahead of the law.
Even if that's true, however, it does not fully explain the drug lord's complete imperviousness to prosecution. It's hard to imagine how one or two corrupt narcotics agents could have held off the entire U.S. law enforcement community, especially when the DEA and FBI had been aware of Norwin's criminal activities since the 1970s. It becomes even harder to fathom given the events that would unfold in late 1984.
"Oh, he [Meneses] was totally protected by the U.S. government," insisted Contra supporter Dennis Ainsworth, a former San Francisco—area economics professor. "He was protected by everyone under the sun."
That conclusion had been a difficult and painful one for Ainsworth to reach. A staunch conservative and Republican party stalwart, the tall, patrician Ainsworth had believed in the Contras, and threw himself wholeheartedly into their cause starting in late 1983, when he became involved in efforts to assist Nicaraguan refugees who had settled in San Francisco after fleeing the Sandinistas. The Nicaraguans, he said, most of whom had been Somoza supporters, had difficulty getting help from the liberal churches in San Francisco, which Ainsworth claimed were interested only in assisting refugees from right- wing Central American dictatorships. "All of a sudden, bang, we've got a problem in our backyard, and nobody wanted to help them," Ainsworth recalled. "And so, I met some of the Nicaraguans and we started helping. Getting clothing donations and stuff like that."
In February 1984, Ainsworth said, he saw an announcement in the San Francisco Chronicle about a seminar at the Sir Francis Drake Hotel concerning Central America and the Contras. He attended and met Julio Bonilla, a Nicaraguan who was the local coordinator of the FDN. The men chatted briefly and exchanged phone numbers. (According to one published source, Norwin Meneses helped finance that seminar at the Drake.) About three weeks later, Ainsworth said, Bonilla called him and invited him to an informal gathering at a house on Colon Avenue in San Francisco, to meet with some of the Nicaraguans who had helped put the seminar together. Ainsworth found a pleasant group of middle-class husbands and wives, many of them recent immigrants. One, he said, had been Anastasio Somoza's dentist. Their leader was a jovial pharmaceutical salesman, Don Sinicco, known to others in the trade as "Mr. Maalox" because he sold the popular antacid to local hospitals. Sinicco was not Nicaraguan; he was born in Italy and lived there until 1938, when Mussolini came to power. He later married a Nicaraguan, Nydia Gonzales, the daughter of a powerful Nicaraguan general, Fernando Gonzales. Through them, he became fascinated with Nicaraguan politics.
As the covert war in Nicaragua escalated, stories about the conflict began popping up in San Francisco's newspapers, and Sinicco read them avidly, but not happily. He believed the press was cheerleading for the Sandinistas, and he fired off dozens letters to the newspapers, chiding them for their "slant." Many were published. "I got a reputation," he said proudly.
In late 1983, Sinicco said, he got a call from a man named Adolfo Calero, the head of the political wing of the FDN. Sinicco said Calero called him because of his letter-writing campaign, which flattered him considerably. "He said, 'We need someone like you to help us get the word out. People will listen to you because you're an American.' So they contacted me, and I said that's fine." At Calero's suggestion, Sinicco formed a small organization called United Support Against Communism in the Americas (US AC A), and he and his friends began holding regular meetings, casting about for ways to publicize the Contras' plight.
Sinicco said he'd never met Calero before, but his wife and Calero's wife were old friends. In Managua, Calero had been a well-known businessman, a Chamber of Commerce type who'd run the bottling plant for the local Coca-Cola distributorship. He was also a CIA asset, someone the U.S. government had hoped might replace Somoza as Nicaragua's president before the Sandinista takeover. According to former FDN director Edgar Chamorro, Calero "had been working for the CIA in Nicaragua for a long time. He served as, among other things, a conduit of funds from the United States Embassy to various student and labor organizations." In early 1983 the CIA had brought Calero out of Nicaragua and installed him as the political director of the FDN; his broad, acne-scarred visage soon became the most familiar face of the Contra rebels in the United States. Tall and imposing, Calero spoke English well, not surprisingly for a graduate of Notre Dame University in South Bend, Indiana. "Calero and Bermudez were our main links with the CIA," Chamorro declared. "They met constantly with the CIA station chief."
In 1984 Calero began visiting San Francisco frequently, Ainsworth and Sinicco said, and would usually stay at their homes while in the city attending to FDN business. While finding Calero personable and smooth, Ainsworth was dismayed by the lack of political sophistication displayed by the FDN support group Sinicco had assembled at Calero's request. The Nicaraguans were eager and committed to the Contra cause, Ainsworth recalled, but there wasn't a soul among them who knew anything about working the American political system. "That little group that used to meet at his house. . .would have done nothing if I hadn't come over and said, 'Look, I'll set these things up.' All Sinicco and his friends were thinking of doing was writing a few letters to the editor. They had no connections whatsoever. And I happened to walk in and I was a well- connected guy."
Ainsworth gently suggested to the Nicaraguans that there were other ways of drawing attention to their cause. Why not sponsor a speaking tour for some Contra officials, such as Adolfo Calero? Bring him to town, show him around, get some press coverage. Sinicco, who was USACA's president, said he and his friends were "very impressed" with Ainsworth's ideas and his political connections and voted to make him a director of their new group. "As far as I knew, he was presumably very active in Republican politics. He knew senators, he knew representatives, both federal and in Sacramento. He knew the chairman of the party. He seemed to be influential and was active internationally in anti¬ communist efforts," Sinicco said. Ainsworth, he said, began opening doors all across San Francisco. "He was the one who appeared to be able to get us these bookings at places like the Olympic Club, the Commonwealth Club. None of us belonged to those kind of places. But he either did or knew people that did. He was able to devote his full-time attention to the group. Most of the rest of us were working men. We had businesses to run, jobs to go to."
On June 4, 1984, Ainsworth arranged a private reception for Calero at the exclusive St. Francis Yacht Club in San Francisco with about sixty of the city's most influential business leaders and Republicans. "It was just a chance for everybody to meet and greet. It wasn't a fund-raiser. Calero was in the news, he was a newsmaker, and some people I knew had expressed an interest in meeting him," Ainsworth said. Calero gave a short speech, answered a few questions, and mingled. "The cocktail party went very smoothly," Ainsworth would later tell the FBI.
Afterward, Calero, Ainsworth, Sinicco, and about twenty others drove over to Caesar's Italian Restaurant, one of the many near Fisherman's Wharf. When the bill came, Ainsworth said, a small neatly dressed man he had not noticed before called the waiter over and picked up the tab for the entire party. Ainsworth leaned over and asked a Nicaraguan friend who Mr. Generosity was. "You don't want to know," was the response he said he got.
Sinicco said he initially assumed one of the Mendoza brothers—two strident Cuban anti-Communists who were members of US AC A—had paid the bill. "When we called for the check, we were told it had been taken care of, and I thought it was one of the Cubans who'd paid for it. I thought Max [Mendozaj's brother had paid for the dinner, and in fact I went up and thanked him afterwards and I'm sure he wonders to this day what I was thanking him for." Before the evening was over, Sinicco was set straight by another Nicaraguan: the big spender was named Norwin Meneses. He owned a restaurant and a travel agency in the Mission District. "I'd never heard of him," Sinicco said, "but we were glad for the financial assistance."
At the end of the dinner, Ainsworth stood and announced that in two days, Don Sinicco was going to be hosting a cocktail party for their esteemed guest, Adolfo Calero, and that everyone in the room was invited.
At the party two days later, Norwin Meneses came in with the crowd dressed in an expensive white linen sports coat with a cashmere overcoat draped over his arm. Sinicco said Meneses spoke to Calero briefly, and the two men retired to a back bedroom, apparently for a meeting. Ainsworth confirmed that. Calero has said he never met privately with Meneses.
Later, as the party was winding down, Sinicco got out his Instamatic camera and began snapping pictures of the historic occasion. He got a shot of some of the wives posing behind a handmade cloth map of Nicaragua. He snapped one of Max Mendoza, the Cuban, with a big grin on his mustachioed face. Sinicco found Calero in the kitchen, huddled by the refrigerator with Meneses, San Francisco FDN coordinator Julio Bonilla, and some other local FDN officials. He told the group to smile and lined up the shot, but just as he snapped the shutter, Meneses closed his eyes and turned away. "Let me get another real quick," Sinicco said. This time Meneses kept his eyes open, but he didn't smile. He looked at Sinicco and glared. Calero posed with a tight smile on his face.
Sinicco suddenly remembered Meneses from the restaurant two nights earlier, and he approached him and thanked him for his kindness. "I told him that now that he knew where we lived, he should come to our next [US AC A] meeting and he said that he would, but that he really needed to leave now."
After that Meneses began attending USACA's meetings, Sinicco recalled, usually arriving with the Mendoza brothers, who ran a Cuban anti-Communist group in San Francisco. Ainsworth said he did not believe there was a connection between Meneses and the Cubans, other than a political one. However, a former FDN mercenary from Florida, Jack Terrell, said Meneses was plugged tightlyy into the Cuban exile community in Miami. "He assisted the Cuban Legion in their radio propaganda shows coming from Miami," Terrell said, adding that Meneses was an associate of several members of the 2506 Brigade, which was made up of Bay of Pigs veterans.
Sinicco showed the author attendance records, minutes of meetings, and other assorted paperwork he kept as USACA's president. One of the documents he provided was a handwritten note that he said were his talking points for one of USACA's earliest meetings. "Our first time venture as USACA has proven highly successful," Sinicco had written, and he listed "seven successes." The first was that "Adolfo was brought over."
Success No. 6: "We are receiving some attention from some Cuban people who appear eager to help."
Success No. 7: "Mr. Meneces' [sic] contribution." Meneses dropped a $160 contribution on the little group one night, Sinicco said, and picked up another dinner for $324.20.
According to Sinicco's files, another founding member of USACA was Father Thomas F. Dowling, a San Franciscan whom Sinicco said was "some kind of a priest." Though he sometimes passed himself off as a Roman Catholic priest, Dowling was an ordained member of a tiny splinter church called the North American Old Roman Catholic Church of the Utrecht Succession, a church whose legitimacy is a matter of some debate. While working with USACA and the Contras, Dowling appeared before Congress in 1985 sporting a clerical collar and identifying himself as a Catholic priest, to testify as a purported witness to Sandinista atrocities. His appearance had been arranged by the State Department's Office of Public Diplomacy for Latin America, later described by congressional investigators as an illegal CIA-run domestic propaganda mill.
"Senior CIA officials with backgrounds in covert operations, as well as military intelligence and psychological operations specialists from the Department of Defense, were deeply involved in establishing and participating in a domestic political and propaganda operation run through an obscure bureau in the Department of State," a 1992 House committee staff report concluded. "Almost all of these activities were hidden from public view and many of the individuals involved were never questioned or interviewed by the Iran/Contra committees."
Through that office, the CIA and the National Security Council engaged in "a domestic, covert operation designed to lobby the Congress, manipulate the media and influence domestic public opinion," the report said, echoing a 1987 investigation by the Comptroller General of the United States, which said the State Department had engaged in "prohibited, covert propaganda activities."
Dowling later admitted receiving about $73,000 in cash and travelers checks from Oliver North, CIA agent Adolfo Calero and other members of North's operation between 1986 and 1987 "to affect public opinion favorably toward the Reagan position inside, regarding Central America." Dowling testified that the money went to a non-profit organization he'd set up in San Francisco called the Latin America Strategic Studies Institute (LASSI). In addition to Dowling, LAS SI employed a recently retired CIA officer with extensive Latin American experience, G. James Quesada, a Nicaraguan who lived in the San Francisco area. "I met [Quesada] when I spoke before the retired group of intelligence officers a few years back," Dowling testified in 1987.
Quesada confirmed that he worked with Dowling but said he did so as private citizen, not for the CIA. "I know nobody thinks a CIA agent ever retires, but I really did retire," he said in an interview, with a laugh. Quesada also met Norwin Meneses and Danilo Blandon at an FDN meeting, and instantly, he said, his antennae went up. "I found out what Meneses was pretty quickly, but he was not involved in our side of things, which was the political side," Quesada said. Meneses and Blandon had something to do with "the other side," meaning the military part of the Contra operation. "As I recall, Blandon was looking for medical students or was recruiting medical students to go down to Honduras. I stayed away from both of them."
In addition to his work with Oliver North and the San Francisco FDN, Father Dowling was also heavily involved with CAUSA, a conservative political organization that was part of the Rev. Sun-Myung Moon's Unification Church. During the time of the CIA funding cutoff, Moon's organization—which was linked in the 1970s to the Korean Central Intelligence Agency—stepped in and began funneling money and supplies to the Contras. Dowling was a member of CAUSA's national advisory board and a frequent speaker at CAUSA rallies and conferences. Among the documents US AC A founder Sinicco showed the author was an August 1984 letter from CAUSA's president, retired air force general E. D. Woellner, thanking Sinicco's organization for attending the annual CAUSA convention and suggesting that the groups work more closely in the future.
Though the combination of fringe religions and the Contras may seem strange, partly declassified CIA records show that the agency had evidence as far back as 1982 that there were unwholesome connections between Meneses's drug ring, the FDN, and an unnamed religious organization in the United States. According to a 1998 CIA Inspector General's report, the CIA's Domestic Collection Division picked up word in October 1982 that "there are indications of links between (a U.S. religious organization) and two Nicaraguan counter-revolutionary groups." The heavily censored CIA cable said, "These links involve an exchange in [the United States] of narcotics for arms."
The CIA's domestic spies reported that "there was to be a meeting among the participants in Costa Rica regarding this exchange" and that two U.S. law enforcement agencies were aware of it. Though the agencies were not named in the censored CIA cable, the FBI had the Meneses organization under investigation at the time and had learned through wiretaps that Norwin's Costa Rican Contra associates—Horacio Pereira, Troilo Sanchez, and Fernando Sanchez—were shipping cocaine to San Francisco.
CIA headquarters ordered its domestic agents to get more information about the upcoming meeting in Costa Rica, and a few days later another cable arrived at Langley with additional details. "The attendees at the meeting would include representatives from the FDN and UDN, and several unidentified U.S. citizens," the CIA cable reported. It "identified Renato Pena as one of four persons—along with three unidentified U.S. citizens—who would represent the FDN at the Costa Rica meeting."
Renato Pena Cabrera was one of Norwin Meneses's San Francisco drug dealers and a friend of Dennis Ainsworth. Pena was dating Danilo Blandon's sister, Leysla, and was a top official in the San Francisco FDN. Pena told CIA investigators that he met Meneses in 1982 at an FDN meeting and served as an official representative of the FDN's political wing in northern California from 1982 until mid-1984. After that, he said, he "was appointed to be the military representative of the FDN in San Francisco, in part because of Norwin Meneses' close relationship with [Enrique] Bermudez."
Pena said Norwin introduced him to his nephew, Jairo, who was in charge of distributing the family's cocaine to other dealers. Soon, the young Contra found himself hauling cash and drugs up and down the freeways of the Golden State. "Pena says he made from six to eight trips from San Francisco to Los Angeles between 1982 and 1984 for Meneses' drug trafficking organization," the CIA Inspector General reported. "Each time, he says, he carried anywhere from $600,000 to $1,000,000 to Los Angeles and returned to San Francisco with six to eight kilograms of cocaine. Pena says that a Colombian associate of Meneses told Pena in general terms that a portion of the proceeds from the sale of the cocaine Pena brought to San Francisco were going to the Contras."
Even with the inflated cocaine prices of the early 1980s, the amount of money Pena was taking to L.A. was far more than was needed to pay for six to eight kilos of cocaine. It seems likely that the excess—$300,000 to $500,000 per trip—was the Contras' cut of the drug proceeds.
When the information about Renato Pena's involvement in the upcoming Costa Rican meeting was relayed back to Langley, CIA headquarters immediately ordered the Domestic Collection Division to halt any further investigation, allegedly because "of the apparent participation of U.S. citizens." But the agency began having second thoughts about sitting on the information. On November 17, 1982, Langley worriedly cabled one of its stations in Latin America to tell its agents that while headquarters didn't think the reports about the Contras and drugs were true, "the information was surfaced by another [U.S. government] agency and may return to haunt us. Feel we must try to confirm or refute the information if possible." Langley wanted to know if Contra leaders had "scheduled any meeting in the next few weeks? If so, what information do you have regarding the attendees?"
The response was probably not what CIA headquarters wanted to hear. "Several Contra officials had recently gone to the United States for a series of meetings, including a meeting with Contra supporters in San Francisco," the Central American CIA station reported back. (It was during October 1982 that FDN leaders met with Meneses in L.A. and San Francisco in an effort to set up local Contra support groups in those cities.)
The CIA Inspector General's report is silent about what, if anything, the agency did next. Pena told CIA inspectors that the unnamed U.S. religious organization mentioned in the CIA cables "was an FDN political ally that provided only humanitarian aid to Nicaraguan refugees and logistical support for Contra-related rallies, such as printing services and portable stages."
When Renato Pena and Meneses's nephew Jairo were arrested on cocaine trafficking charges in November 1984, Ainsworth began suspecting that the FDN was also involved in drug trafficking. "Renato wasn't a drug dealer," Ainsworth said. "He was a Contra and he was duped. When Congress cut off aid in the fall of 1983, these guys had nowhere else to turn and they wanted to get their country back. And once you say I'll do anything to get my country back, then they were easy prey for Meneses, who said, 'Hey, you do this for me and I'll help you guys out.'"
Agents found a kilo of cocaine in the trunk of Pena's car. At an apartment Jairo Meneses maintained in Oakland as a cocaine storehouse, the DEA found half a kilo in a safe. Because the evidence against him was so overwhelming— hand-to-hand sales to DEA agents and a kilo in his car—Pena pleaded guilty to one count of possession of cocaine with intent to sell in March 1985. He also agreed to help the government prosecute Jairo Meneses, and was given a two- year sentence in return.
As part of his deal with the government, Renato Pena was extensively debriefed by the DEA and his interviews were nothing short of astonishing— which is probably why they remained sealed for 15 years.
"When debriefed by the DEA in the early 1980s, Pena said that the CIA was allowing the Contras to fly drugs into the United States, sell them, and keep the proceeds," the Justice Department Inspector General reported in 1997. Jairo Meneses had told him that "the United States was aware of these dealings and that it was highly unlikely that I would even get in trouble." Both Norwin Meneses and Blandon told him they were raising money for the Contras through drug dealing; Blandon had even claimed "the Contras would not have been able to operate without drug proceeds."
Further, FDN leader Enrique Bermudez "was aware of the drug dealing" and Pena described Bermudez as "a CIA agent." When challenged by CIA questioners on that statement, Pena merely laughed. "It's very obvious," he said: Bermudez had been Somoza's military attache in Washington and it was common knowledge in Nicaragua that anyone who had that job under Somoza also worked for the CIA. (Bermudez, in fact, was on the CIA's payroll from 1980 to 1991, which means at the least that he was a contract agent, if not an agency officer.)
As if Pena's testimony wasn't convincing enough, the DEA obtained independent corroboration in the spring of 1986 from a longtime informant who'd known Meneses since childhood described by the DEA as "extremely reliable." He told a DEA intelligence analyst that Meneses was indeed part of the FDN and had been using drug money to buy weapons for the Contras. He also vouched for Renato Pena's credibility: "Renato Pena worked for Jairo Meneses and ran the San Francisco office of the FDN," the informant explained. "Pena was one of the major Contra fund raisers in San Francisco and was one of those responsible for sending Meneses' drug proceeds to the Contras."
In interview years later with inspectors from the CIA and the Justice Department, Pena defiantly stood his ground, even though he was under threat of immediate deportation. He insisted that "the CIA knows about all these things. . .The money the Contras received from the Reagan Administration was peanuts and the growing military organization needed supplies, arms, food, and money to support the families of the Contras. The CIA decided to recruit Meneses so that dmg sales could be used to support the Contras. Bermudez could not have recruited Meneses on his own. . .but would have had to follow orders."
Ainsworth said Pena was devastated by his arrest and confessed to him his role in the Contra drug network. Alarmed, Ainsworth began looking into the relationship between the FDN and drugs. He made "inquiries in the local San Francisco Nicaraguan community and wondered among his acquaintances what Adolfo Calero and other people in the FDN movement were doing and the word that he received back is that they were probably engaged in cocaine smuggling," Ainsworth later told the FBI.
During one of Ainsworth's trips to Washington in 1985, he said, "I went to see some friends of mine and started asking some questions." One friend slipped Ainsworth a copy of a Drug Enforcement Administration intelligence report dated February 6, 1984. The DEA report, prepared by agent Sandalio Gonzalez in San Jose, Costa Rica, told of the results of a debriefing of a confidential informant. Ainsworth's heart sank as he read it. The informant "related that Norwin Meneses Cantarero, Edmundo's younger brother, was presently residing in San Jose, Costa Rica, and is the apparent head of a criminal organization responsible for smuggling kilogram quantities of cocaine to the United States." The discovery left Ainsworth reeling: "I had gone through the Looking Glass. I had crossed over into the nether world that 99 percent of the population wouldn't even believe existed."
In September 1985 Ainsworth was contacted by a U.S. Customs Service official who was "investigating the Nicaraguan role in a large narcotics ring extending from Miami, Florida to Texas and California." The Customs agent wanted to ask Ainsworth about the FDN. "During the contact, [name deleted] complained to Ainsworth that national security interests kept him from making good narcotics cases and he acted frustrated at this chain of events," Ainsworth would later tell the FBI. "According to [name deleted] two U.S. Customs Service officers who felt threatened and intimidated by National Security interference in legitimate narcotics smuggling investigations had resigned and had assumed false identities." The FBI report went on to say that the Customs agent "told Ainsworth that Norwin Meneses would have been arrested in a major drug case in 1983 or 1984 except that he had been warned by a corrupt [information deleted] officer."
Other law enforcement sources told Ainsworth "they had a file on Meneses that was two feet thick. I thought this bastard should have been arrested. I assumed there would be an outstanding warrant on this guy. I was amazed. There wasn't a single outstanding warrant on Meneses. Not one. They had no interest in him whatsoever. Here you had a major cocaine trafficker who was deeply involved with the Contras, and apparently, everyone but me knew about it. After I broke with Calero, I found out Calero and Meneses were very good friends."
Calero has admitted meeting with Meneses on at least six occasions in San Francisco, but he has portrayed them as simple greetings during large public gatherings. He has repeatedly denied knowing Meneses was a drug trafficker, yet he admitted to a Costa Rican paper in 1986 that he knew Meneses was "involved in some illegal things, but I don't know anything."
USACA president Don Sinicco said he never suspected Norwin Meneses was involved in criminal activities, but he confirmed that Ainsworth began muttering about it. "What always bothered me about [Dennis] is that towards the end, I don't know what, he seemed to get disillusioned or disgusted with Calero. Dennis got disillusioned about something," Sinicco said.
Ainsworth's disillusionment caused him to quit working with the Contras and seek out the FBI. In early 1987, records show, during his first meeting with FBI agents, Ainsworth warned them that the FDN "has become more involved in selling arms and cocaine for personal gain than in a military effort to overthrow the current Nicaraguan Sandinista government." He told the agents about Norwin Meneses and Renato Pena, about Tom Dowling and Oliver North, and about North's illegal Contra support network in the U.S. and Central America. Much of the information Ainsworth gave the FBI and, later, Iran-Contra prosecutor Lawrence Walsh's staff about the inner workings of the FDN and the relationships between Contra leaders and U.S. government officials was corroborated during the congressional Iran-Contra investigations.
Ainsworth was also getting death threats, he told the FBI, but the agents seemed unimpressed. "He had no information to substantiate this alleged threat," they wrote. Ainsworth never heard from them again. "I mean, here I am as a citizen, I complained to the FBI and they tell me they have no interest in the case. Then I call Walsh's people up and they sent a couple FBI guys out to talk to me and they have no interest in it. I couldn't find anyone who was interested in this. And I made a legitimate effort. And people were like, 'Den, leave this alone. Just leave it alone,"' Ainsworth remembered. "I thought I was part of the establishment. And all of a sudden I was a leper." Frightened and heartsick, Ainsworth fled California for the East Coast, where he went into semiseclusion.
Meanwhile, the narcotics investigation that began with the arrests of Renato Pena and Jairo Meneses seemed to fall into a black hole. The case federal prosecutors had assembled against the drug kingpin's nephew was a slam-dunk. They'd found cocaine in Jairo's apartment; his codefendant had cut a deal and was prepared to testify for the government. If convicted of the charges against him—one count of conspiracy to distribute cocaine and six counts of possession with intent to distribute—Jairo Meneses would spend the next fifteen years in the federal pen. His decision to plead guilty and rat out Uncle Norwin could hardly be considered a surprise.
Like Pena, Jairo Meneses was debriefed by the DEA and he, too, implicated the Contras in Norwin's drug sales, confirming that his uncle had direct dealings with both Blandon and FDN commander Enrique Bermudez. But his admissions in court were limited to the bookkeeping work he'd done for Norwin in San Francisco; he never breathed a word in public about the Contras.
Were these men telling the truth? If one looks at the outcome of their criminal cases, the inescapable conclusion is that they were. Inventing stories about Contra drug trafficking was not the usual way admitted dope dealers ingratiated themselves with Ed Meese and his hypersensitive Justice Department. But despite being caught red-handed with pounds of cocaine, they were neither sent to jail nor deported. They got probation and a work-furlough job and kept their mouths shut, which suggests that the Justice Department found them entirely too believable.
In an interview with a Costa Rican paper in 1986, Meneses scoffed at his nephew's testimony. Jairo had made it up, Norwin declared, because he'd refused to bail the boy out when he'd gotten arrested. "If Jairo supposedly was my accountant, like he says, I would have been interested in taking him out of jail because he would have had me by the tail," Meneses told La Nacion. "Isn't that logical?" (Norwin didn't mention that Jairo's bail was paid by Danilo Blandon's sister, Leysla Balladares, who also bailed out Pena, her boyfriend.) "Besides," Norwin added, "I remained in San Francisco. I have never hidden. There's never been a warrant for my arrest. I have not changed passports. That I directed a dmg trafficking organization is totally false."
Some of Meneses's assertions were indeed irrefutable. With the testimony of Jairo Meneses and Renato Pena, and the stacks of other evidence the police had compiled against him over the years, it would have been a relatively easy matter to have convicted the drug lord on any number of trafficking and conspiracy charges. Many dopers have gone to jail on much less evidence. At a minimum, the government could have deported him as an undesirable alien and banned him forever from the United States; he was, after all, living in the United States as a guest of the government—a political refugee.
But it didn't happen. Nothing happened. Norwin Meneses continued living as a free man, crisscrossing U.S. borders with impunity, dealing cocaine and sending supplies to the Contras. And his relationship with the U.S. government grew even closer.
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