FOR IMMEDIATE RELEASE 
March 16, 1998 CONTACT: Marcela Howell
(202) 225-2201 

Testimony of Rep. Maxine Waters
Before the House Permanent Select Committee on Intelligence
On the CIA OIG Report of Investigation
"Allegations of Connections Between CIA and Contras in Cocaine Trafficking
to the US" "Volume I: The California Story"

March 16, 1998 

Mr. Chairman, Members of the Committee, I am here today to testify about the
failure of the Central Intelligence Agency (CIA) to conduct a serious and
thorough investigation into the allegations of CIA involvement in cocaine
trafficking to fund its Contra war activities. Unfortunately, my fear that the
CIA would be unable to investigate itself has been confirmed with this report.
The Inspector General's Report lacks credibility. It is fraught with
contradictions and illogical conclusions. 

In a September 3, 1996 memo, then CIA Director John Deutch laid out the
framework for this investigation. In his instructions to CIA Inspector General
Frederick P. Hitz, Director Deutch stated, "I have no reason to believe that
there is any substance to the allegations published in the Mercury News."
Despite his premature conclusion, a serious, substantial and credible
investigation and interview process would have proven him wrong. If the CIA
Director's premature conclusion was meant to direct the final outcome, he has
succeeded. This Report's sweeping denial of the CIA's knowledge of drug
trafficking related to the Contras defies the evidence and the logic that the
CIA should have known. 

>From the days of the CIA's first response to the allegations raised in the
"Dark Alliance" series, many skeptics believed that the CIA could never produce
a credible or truthful review of wrongdoings by its own agency. These skeptics
could point to this Sunday's Los Angeles Times to confirm their fears. The
Times reported that, after 37 years, the CIA finally admitted publicly the most
profound deception imaginable on an American family. Thomas Pete Ray and his
top secret squadron of National Guard bombers were shot down during a CIA
bombing mission in the Bay of Pigs debacle. For 37 years the CIA denied that
Mr. Ray and his squadron even existed, much less were shot down by Cuban troops
in 1961. Only this month, faced with a document obtained by a Freedom of
Information Act request by the National Security Archives, did the CIA finally
admit the truth - 37 years later. 

My deep concern about the allegations raised in the "Dark Alliance" series that
my government could have in any way been involved in, or had knowledge of, drug
trafficking, has caused me to spend my own time and resources to find out more
about these allegations. 

After reading the "Dark Alliance" series, I interviewed Gary Webb, the writer
of the series. I invited him to come to my district in South Central Los
Angeles to respond to questions from local residents. My community encouraged
my investigation and supported me in my efforts to delve deeper into these
allegations. 

I personally interviewed a number of key figures in the "Dark Alliance" series.
I first interviewed Alan Fenster, the attorney for Ricky Ross. Then I drove to
San Diego to interview Mr. Ross who was being held in the Metropolitan
detention facility on drug charges. 

I also drove to a restaurant in the Valley where I met with Celerino "Sully"
Castillo, the DEA agent who had investigated the drug trafficking operation at
the Ilopango airfield in El Salvador. Castillo had documented that the CIA
directed this drug trafficking operation out of two hangers, using the Contra
supply network as the route for shipping drugs into the U.S. 

I interviewed former LAPD officer Mike Ruppert, who states he was forced to
leave LAPD after he uncovered a connection between the CIA and narcotic
trafficking operations in California and Louisiana. Mr. Ruppert also was
interviewed by the CIA for its Report. 

I met and had numerous telephone conversations with Jerry Guzetta, a detective
with the City of Bell and a key member of the multi-agency task force working
with the LA Sheriff's Department investigating the Blandon narcotics operation.
Guzetta was the Level 1 informant whose information was the basis of the
affidavit of LA Sheriff Tom Gordon that resulted in the October 1986 raid of
the Blandon operation's 14 sites in Southern California. 

I visited the records division of the LA Sheriff's Department and uncovered the
Sheriff's reports regarding the October 1986 drug bust. I was the first to
obtain copies of the documentation regarding the raids. 

On January 3, 1997, using my personal funds, I flew to Nicaragua to meet with
Enrique Miranda Jaime, a former Sandanista official and drug partner of Norwin
Meneses, a central figure in the allegations in the "Dark Alliance" series. I
was contacted by someone who had information about the Colombian Cartels and
their connection to Norwin Meneses. When I arrived in Nicaragua, I was taken to
the prison in the town of Grenada by the State Department where I met with
Miranda himself. Mr. Miranda told me some of the information that he gave to
the CIA in this investigation, which is reported on pages 54 and 55 of the IG's
Report. 

Mr. Miranda currently is in prison after being convicted for smuggling 764
kilos of cocaine with his partner Norwin Meneses. Meneses told Miranda - in
detail - that Meneses worked for the Contras and that his drug trafficking
operation had the support of the CIA. Meneses also told Miranda that he was
receiving support directly from Oliver North and passing on the funds to
support Contra groups. 

I met with Tomas Borge, a former Sandanista Interior Minister and head of
intelligence. Mr. Borge also came to South Central LA to meet with me. I met
with him for several hours. 

I also had numerous telephone conversations with Coral Talavera Baca, the
girlfriend of Rafael Cornejo, who was a relative and part of Norwin Meneses'
drug trafficking organization, as well as a long-time business partner of
Danilo Blandon, another central figure in the "Dark Alliance" series. I
received information from Ms. Baca and Mr. Cornejo who were connected to Carlos
Lehder, a Columbian drug dealer and co-founder of the Medellin Cartel. It was
through Lehder's private island that the Medellin Cartel moved massive amounts
of cocaine to Miami and the United States. Ms. Baca had visited Carlos Lehder's
private island and have information regarding the connection between Mr. Lehder
and Norwin Meneses. 

I have looked into many of the main allegations raised in Gary Webb's series
and I have thoroughly reviewed the Inspector General's Report. In addition, I
have read many letters and reviewed volumes of information sent to me and have
visited a large number of people who have claimed to have information about the
drug dealing in South Central Los Angeles. In my informed opinion, the CIA IG
Report and the investigation lacks credibility and its conclusions should be
dismissed. 

Let me turn to some of the specifics of the Inspector General's Report. 

The average reader likely will find the structure of this Report bizarre and
confusing. I also question the Report's methodology, its sweeping conclusions,
its cleverly worded denials and its selective quoting of documents. 

The Report states that 365 interviews were conducted, but only summarizes
statements from 12 individuals connected to the South Central Los Angeles
specific allegations. I have a list of over 70 individuals who should have been
interviewed under oath by the CIA if the investigation was to be considered
credible. Did the CIA interview all of these people? Because the Report fails
to list who was interviewed, we have no way of knowing. 

In addition, only 40 pages of this Report titled "The California Story"
actually deal with the allegations of the South Central/crack cocaine/Contra
connection. 

The Report mentions a half dozen other CIA and Contra officials interviewed,
but does not offer even a cursory summary of their testimony. So let me do what
the Report failed to do. The following individuals associated with the Contras
are, or were, either CIA agents or CIA assets: 


Adolpho Calero 
Enrique Bermudez 
Marcos Aguado - Contra pilot and accused drug dealer. 
Francisco Aviles - Contra official in Costa Rica in Frogman case. 
Ivan Gomez - CIA agent who accepted drug money from Meneses. 
Dagaberto Nunez - ran shrimp company for Oliver North in Costa Rica. 
Rene Corvo - Cuban American who worked with Contras in Costa Rica. 
Francisco Chanes - Owner of shrimp company for Oliver North in Costa Rica. 
Edmundo Meneses - American-trained Nicaraguan general and Norwin's brother. 
Sebastian Gonzalez - Contra leader in Costa Rica and drug partner of Meneses. 
Today, I am asking this Committee to obtain a written response from the CIA
that either categorically confirms or denies they are or were CIA assets or
agents. 

Another major problem with the investigation underlying the Report was the
CIA's lack of subpoena power. This meant that some of the most important CIA
and other officials were never interviewed. Three former unnamed senior CIA
managers would only respond in writing. Six other key CIA personnel and former
DEA agent, "Sully" Castillo, refused to be interviewed. The CIA agents included
Duane Clarridge, Joseph Fernandez, and Clair George. All of these senior CIA
officials had major responsibilities for the CIA's Contra operation. There can
be no thorough investigation without sworn testimony from each of these
individuals. 

Joseph Fernandez was the former CIA station chief in Costa Rica while the
Meneses' drug organization was operating from there. Duane "Dewey" Clarridge
was the CIA officer who helped create the Contras at a time when the Meneses
ring first began dealing cocaine for the FDN. His name also appeared in Oliver
North's notebooks as being responsible for making quid pro quo deals with known
drug kingpin Manuel Noriega. 

Clarridge summed up how serious he thought this investigation was when he told
reporters in December 1997 that [the CIA] quote "sent me questions that were
bullshit, and I wrote back they were a bunch of bullshit." 

When I spoke with journalists following the release of the Report this past
January, much to my surprise, many had to admit to me they had not even read
the entire report. They admitted that they only had read the glossy eight page
summary which offered unsubstantiated conclusions of the CIA's innocence and
blanket denials of the "Dark Alliance" series allegations. Had they only read
the report in its entirety as I did, they would have learned that allegations
of drug trafficking and connections between the Contra and the CIA were not
new. In fact, the Report even lists and summarizes some of the other
investigations that found Contra involvement in drug trafficking. 

For example, the Senate Subcommittee on Terrorism, Narcotics and International
Operations, chaired by Senator John Kerry conducted a two-year investigation
into allegations of Contra involvement in drugs and arms trafficking. The CIA
Inspector General's Report summarizes some of the Kerry Commission's 1,166-page
report's devastating findings on pages 35 through 38. These are some of the
admissions: 


Drug traffickers used the Contra war and their ties to the Contras as a cover
for their criminal enterprises in Honduras and Costa Rica. Assistance from the
drug lords was crucial to the Contras, and the traffickers in turn promoted and
protected their operations by associating with the Contra movement. 

Drug traffickers provided support to the Contras and used the supply network of
the Contras. Contras knowingly received both financial and material assistance
from the drug traffickers. 

In each case, one or another U.S. Government agency had information regarding
these matters either while they were occurring, or immediately thereafter. 

Members of the Contra movement were involved in drug trafficking, including
pilots who flew supplies for the Contras, mercenaries who worked for the
Contras and Contra supporters throughout Central America. 

Drug traffickers helped in the Contra supply operations through business
relations with Contra groups. 

Drug traffickers contributed cash, weapons, planes, pilots, air supply services
and other materials to the Contras. 

U.S. State Department funds, authorized by Congress for humanitarian
assistance, was paid to drug traffickers. In some cases, these drug traffickers
received the State Department funds, after having been indicted by federal law
enforcement agencies on drug charges, and in other cases, were the subject of
pending investigations by those agencies. 

The FDN Contra group moved Contra funds through a narcotics drug trafficking
and money laundering operation. 

Drug trafficking for the Contra movement was done by some because they were
told that their actions were either on behalf of, or sanctioned by, the U.S.
Government.
 
Not included in the CIA IG Report are other key findings by the Kerry
Committee. 


Despite widespread trafficking through the war zones of northern Costa Rica,
the Kerry Committee was unable to find a single case which was made on the
basis of a tip or report by an official of a U.S. intelligence agency. This
despite an executive order requiring intelligence agencies to report drug
trafficking to law enforcement officials and despite direct testimony that drug
trafficking on the Southern Front was reported to CIA officials. 

U.S. officials involved with the Contras knew that drug traffickers were using
the Contra infrastructure and that the Contras were receiving assistance from
drug profits. Yet, they turned a blind eye and did not report these individuals
to the appropriate law enforcement agencies. 
How can this Report include these incriminating findings by elected officials,
including Senators Kerry, Brock and Moynihan and others while summarily
dismissing any CIA knowledge of, or involvement in, Contra drug trafficking
into the U.S.? This is an outrageous contradiction. 

Moreover, the Report is littered with damaging admissions. 


Norwin Meneses was one of the biggest drug dealers in America, either North and
South, and he supplied Danilo Blandon. Blandon, in turn, was the source who
supplied Ricky Ross. And Blandon and Meneses did so unhindered by the CIA. 
Is it unreasonable to think Meneses was connected to the CIA given that the
Contras were a CIA creation and that the CIA handled every aspect of the Contra
operation? Pages 22 through 24 of this Report confirms that the CIA essentially
created, funded, supplied, and trained the Contras and that the CIA was
intimately involved in determining their strategy and running their operations. 

Meneses was never arrested by U.S. law enforcement. He was permitted free
entrance to the U.S. and was even issued a visa. How was this allowed and why
was it allowed to continue? 


The CIA and DEA records are full of knowledge about Meneses' drug dealing
operation. This knowledge was substantiated in this Report. The CIA knew of his
drug trafficking by 1984 and the DEA had known of his trafficking activities as
early as 1974. 

Incredibly, the Report fails to mention anything about the activities of
Adolpho Calero, only mentioning that he was interviewed. He was the key Contra
leader and CIA agent in the Southern Front. 
Damning public information ties Calero to drug trafficking. In a December 1986
interview, Calero told the Costa Rican newspaper La Nacion that he met with
drug kingpin Norwin Meneses at least six times and that he knew Meneses was
involved in illegal activities. 

In addition, there were many other key facts confirmed by the Report: 


Drug Kingpin Norwin Meneses supported and was involved with the Contras-- On
pages 76 - 77, drug dealer Norwin Meneses admitted giving money to the
California chapter of the FDN/Contras and that he was involved in the 1985
attempted to obtain "material support, medical and general supplies" for the
Contra movement. 
Pages 70 - 71 of the Report documents the connection between CIA asset and FDN
military leader Enrique Bermudez, Meneses and Blandon. Blandon and Meneses
"traveled to Bolivia in 1982 to make a drug deal, and stopped in route in
Honduras." While in Honduras, Blandon and Meneses met with Bermudez for the
second time. Bermudez asked Blandon and Meneses to help raise money and
supplies for the FDN. He let the drug traffickers know that their support would
be welcome because "the ends justify the means." 

Blandon then describes how "he and Meneses were escorted to airport by armed
Contras" after the meeting with Bermudez. Blandon left the meeting with
$100,000 to buy drugs. The profits from the sale of these drugs were to be used
to buy supplies and fund the Contras. Blandon tells of how he ran into trouble
at the airport in Honduras when he was caught with the $100,000. But, the
Contras intervened and secured Blandon's release. 

Where did the $100,000 come from? Did they give back the $100,000 to Blandon
because of the Contra-CIA connection? 


The CIA knew that Meneses was both a drug dealer and involved with the Contras
On page 45, the Report documents a declaration from the Records Validation
Officer for the CIA (RVO) submitted in response to the CIA IG Report
investigation. The RVO Declaration certified that the CIA had confirmed to the
FBI that Meneses was a drug trafficker. 
On page 49, the Report details a June 11, 1986 CIA cable from the LA Division
Station informing CIA Headquarters that Contra leader Fernando Chamorro was
asked by Meneses in August or September 1984 to help "move drugs to the U.S."
At the time, Chamorro was a CIA asset. A second June 1986 CIA cable reported
that "Meneses was involved in the transporting of drugs." What did the CIA do
with this information? 

A CIA cable, dated Oct. 31, 1986, contained the following two admissions.
First, it details a CIA cable dated Dec. 5, 1984 reporting that "Norwin Meneses
was apparently well known as the Nicaraguan Mafia, dealing in drugs, weapons
and smuggling and laundering of counterfeit money." Second, it quotes a CIA
cable, dated Mar. 25, 1985, which "described a Norwin ((Meneses)) Cantatero as
the kingpin of narcotics traffickers in Nicaragua prior to the fall of Somoza." 

On page 48, the Report describes a 1984 CIA cable discussing Meneses' drug
trafficking activities with Tuto Munkel and Sebastian Gonzalez Medieta.
Sebastian Gonzalez was a key CIA player in the Contras Southern Front. He was
in charge of logistics for the supply of arms supplied by Manuel Noriega. This
cable shows the CIA knew Gonzalez also was involved in drug trafficking with
Norwin Meneses in 1984 - when the CIA was still directly involved in Contra
operations, before the hand off to Oliver North's operation. Remarkably, this
Report makes no mention of Gonzalez being a key CIA agent, nor mention of his
critical role as a Contra in the Southern Front. Tuto Munkel was arrested in
Florida as part of the Frogman case and is a crucial link between that case and
the Meneses Contra connection detailed above. 

What did the CIA do with this information in their cables? The Report does not
indicate that any action was taken. 

Despite this damning information to the contrary, the Report goes on to quote
Meneses' own testimony as if it were fact. On page 54, the Report repeats
without comment Meneses' denial that he trafficked in cocaine or other
narcotics on behalf of the CIA or any Contra group, and that he denied he ever
had any contact or relationship with CIA, DoS, the U.S. military, or U.S.
civilian assistance groups that provided assistance to the Contras. 

As I mentioned earlier, Enrique Miranda told me some of what he told the CIA
when it interviewed him a year ago in Central America. 


The CIA directly intervened in the Frogman case to protect a CIA asset In one
of the most amazing admissions in this Report, pages 113 through 115 detail the
direct intervention of the CIA in the Frogman Case. The Frogman case was, of
course, California's biggest cocaine bust at that time. The CIA intervened in
the case by arranging the return of $36,000 seized from a drug trafficker. The
CIA did so because of the trafficker's involvement with the Contras and CIA
agents. 
Again, this Report catalogs the pattern of the CIA returning money to known
drug dealers - $100,000 in the Bermudez/Blandon case, $36,000 in the Frogman
case. How many more times did this happen? 

An internal CIA cable dated 1984 details that the CIA made contact with
prosecutors in the Zavala/Frogman case in order to protect what the CIA
believed was an operational equity. That cable is included on page 113, and
makes for incredible reading. Evidently, the CIA feared that exposure of the
CIA's connections to the drug case had "the potential for disaster", according
to a cable described on page 115. 

Well Mr. Chairman, if I have anything to do with it, that cable and the
confirmed facts sifted from this confused Report will mean disaster for the
CIA. 

This Committee has a responsibility to look into the nefarious activities
surrounding the massive Contra-cocaine drug network and to use its subpoena
power to provide the American people with the truth that has been denied them
for too long. 

This document resides at http://speech.csun.edu/ben/news/cia/980316.waters.html