Copyright 1998 Daily News, L.P.  
                             Daily News (New York)
                            June 16, 1998, Tuesday
SECTION: News; Pg.  12
LENGTH: 717 words
HEADLINE: CRACK-CONTRA STORY WON'T DIE
BYLINE: BY JUAN GONZALEZ
 BODY:

	A STANDING-ROOM-ONLY crowd of several hundred people jammed a
	meeting hall in midtown Manhattan on Thursday night to hear the
	details of a news story that refuses to die.

	The story is about the birth of the crack epidemic in this
	country and its connection to Nicaraguan drug traffickers in San
	Francisco who funneled their profits to the CIA-sponsored
	Nicaraguan Contras in Central America in the early 1980s.

	The story was told in a series of articles, "Dark Alliance,"
	that appeared in August 1996 in the San Jose Mercury News.
	Written by investigative reporter Gary Webb, it sparked an
	uproar in black communities across the nation.

	As a result, thousands of blacks in Los Angeles marched in
	protest, federal officials launched three separate probes of
	Webb's allegations and a former CIA director ventured to a
	community meeting in South Central L.A. to personally deny the
	charges.

	It didn't take long for The Washington Post, the Los Angeles
	Times and The New York Times to pan both the series and Webb.
	Each relied on allegations by unnamed CIA or other federal
	sources to "prove" how Webb's account was exaggerated. One
	newspaper even published accounts of how black leaders who
	believed Webb's account were falling into the conspiracy
	paranoia that is supposed to be a special affliction of black
	people.

	Eventually, the executive editor of the Mercury News publicly
	acknowledged several shortcomings in the series and said it had
	"oversimplified" matters. Webb felt forced to resign when his
	editors refused to publish his followup articles.

	So there you have it. A discredited story. A disgraced reporter.
	And a victim, the Central Intelligence Agency, saved from
	slander. Well, not quite.

	Webb and many who believe his story was right on target have
	kept digging.

	One of those is Rep. Maxine Waters, head of the Congressional
	Black Caucus, who has represented South Central Los Angeles for
	more than a decade.

	Waters wondered for years how the crack epidemic spread like
	wildfire in the mid-1980s, decimating her district and other
	inner cities.

	Because of her pressure, a congressional subcommittee learned in
	March of a secret agreement between the CIA and the Justice
	Department to overlook drug trafficking by the CIA's outside
	operatives.

	Last month, she received declassified copies of 1982 letters
	between former CIA Director William Casey and former Attorney
	General William French Smith spelling out the secret agreement.

	A Feb. 11, 1982, letter from Smith to Casey relieved the CIA of
	having to report cases where its informants or outside
	operatives trafficked in drugs.

	A month later, Casey wrote the attorney general saying that the
	exemption "strikes the proper balance between enforcement of the
	law and protection of intelligence sources and methods."

	"This is unbelievable," Waters said. "There is no such thing as
	a "proper balance' when intelligence personnel and assets are
	involved in drug trafficking."

	In late 1982, Congress ordered an end to all funding of a secret
	guerrilla army to overthrow the Sandinistas. The Contras,
	however, continued to operate, thanks to Col. Oliver North's
	fund-raising, and to the Contras' own drug trafficking.

	The substance of Webb's series is that one of those Contra drug
	rings provided the bulk of the cocaine to a street gang in South
	Central L.A. led by Freeway Ricky Ross. Through that cheap
	supply, Ross became the city's biggest dope dealer and one of
	the earliest manufacturers of crack.

	A quick newspaper series could never capture the saga Webb has
	uncovered. After two more years of digging, he has put his
	findings into a 500-page book.

	The CIA issued a 150-page report denying many of the
	allegations. But a second 600-page report by the agency remains
	classified, as does a 400-page investigation by the Justice
	Department.

	EVERYWHERE HE SPEAKS these days, Webb draws a huge crowd. Those
	who came out Thursday night were a cross-section of New Yorkers,
	among them Roger Green, the assemblyman from Brooklyn, and Mike
	Levine, a retired hero federal narcotics agent.

	The story the mainstream press refused to touch just refuses to
	die. If the government wants to bury the story for good, why not
	release the 1,000 pages of classified investigations?

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