Copyright 1996 The New York Times Company  
                               The New York Times
              December 12, 1996, Thursday, Late Edition - Final
SECTION: Section B; Page 17; Column 1; National Desk
LENGTH: 650 words
HEADLINE: Los Angeles Sheriff's Inquiry Finds No C.I.A. Link in Drug Dealing
BYLINE:  AP
DATELINE: MONTEREY PARK, Calif., Dec. 11
 BODY:
   The Los Angeles County Sheriff's Department has reported that it found no
evidence that the Central Intelligence Agency was involved in cocaine
dealing in Los Angeles or that the sheriff's department covered up an agency
link to a 10-year-old drug case.
   An internal investigation that began in October found "no evidence of United 
States Government involvement, including the C.I.A., in the Los Angeles drug
trafficking activities" of Oscar Danilo Blandon, an admitted Nicaraguan drug
dealer, said a summary of the 3,600-page report issued on Tuesday. Mr. Blandon
was also sympathetic to the rebels fighting the Marxist Government of Nicaragua 
in the 1980's with support from the United States.
    The investigation into a possible C.I.A. link to drug dealing was begun
after articles in The San Jose Mercury News in August reported that the growth
in the use of crack in the United States could be traced to Mr. Blandon and
another Nicaraguan accused of being a drug dealer, Juan Norwin Meneses
Canterero, working through Ricky Ross. Last month, in a San Diego courtroom, Mr.
Ross was sentenced to life in prison for drug dealing.
   The articles did not accuse the C.I.A. of directly abetting the sale of
drugs to raise money for the rebels, or contras, but it sparked widespread anger
among blacks.
   "As for the Los Angeles County Sheriff's Department," Sheriff Sherman Block
said on Tuesday at a news conference, "this case is closed."
   The report has been forwarded to the House and Senate intelligence
committees, Sheriff Block said.
   Blacks who have been demanding a thorough investigation into the accusations 
were unimpressed.
   "Sheriff Sherman Block has not answered all the questions," said
Representative Maxine Waters, the California Democrat who is head of the
Congressional Black Caucus. "We're trying to find out whether or not there was a
connection to the contras and these dope dealers. These dope dealers identified 
themselves as C.I.A.-connected on more than one occasion. So we're looking."
   Several Federal investigations are under way into accusations that the
intelligence agency either took part in or countenanced the selling of crack
through black street gangs in South-Central Los Angeles to raise money for the
contras.
   Regarding Mr. Ross and Mr. Blandon, Sheriff Block said the department's
report had concluded that "personal gain was their motivation" for drug dealing.
   Mr. Blandon's contact with the contras "had long since vanished" by the time 
of his involvement with Mr. Ross," Sheriff Block said, "and the money he
received from Ross "went into Blandon's personal pockets or to his Colombian
suppliers."
   The report said allegations of departmental wrongdoing in 14 raids on drug
operations in which Mr. Blandon was suspected of playing a role in 1986 were
unfounded. Mr. Blandon and another suspect, Ronald Lister, were never prosecuted
on charges of drug dealing in connection with the raids because deputies found
only a small amount of drugs.
   In October, Representative Waters cited six-year-old allegations that Mr.
Lister had been allowed to call his "C.I.A. contact" after his home had been
raided, and that some materials seized at the home mysteriously disappeared.
   While several deputies said Mr. Lister had boasted about a C.I.A.
connection, Mr. Lister denied to sheriff's investigators that he had ever told
anyone he actually worked for the agency.
   All evidence and documents that the department gathered from the case are
accounted for or were disposed of legally, Sheriff Block said.
   The sheriff said the investigators had found that three deputies stole
$40,000 from Mr. Blandon's home and $13,000 from Mr. Lister's home in the drug
raids. The three were convicted of theft in an unrelated case, Sheriff Block
said, and will not be prosecuted in the newly discovered thefts because the
statute of limitations has expired.
GRAPHIC: Photo: Los Angeles Sheriff Sherman Block at a briefing yesterday.
(Associated Press)