USDOJ/OIG Special Report
THE CIA-CONTRA-CRACK COCAINE CONTROVERSY:
A REVIEW OF THE JUSTICE DEPARTMENT’S
INVESTIGATIONS AND PROSECUTIONS
(December, 1997)
TABLE OF CONTENTS
Epilogue (July 1998)
Executive Summary
- Introduction
- Oscar Danilo Blandon
- Norwin Meneses
- OIG Analysis of Allegations Regarding Blandon's
and Meneses' Relationship with the Contras and the CIA
- Ronald Lister
- Ricky Ross
- Enrique Miranda-Jaime
- Julio Zavala
- Carlos Cabezas
- Celerino Castillo
- DEA's Response to Information about Contra Drug
Trafficking and Miscellaneous Cases
- Conclusions
Chapter I: Introduction
- The San Jose Mercury News Articles
- The Contra Story
- Reaction from the Journalism Community
- What Did the San Jose Mercury News Articles
Allege?
- Previous Investigations Concerning Allegations of
Contra Drug Trafficking
- Scope of the OIG Investigation
- OIG Investigative Procedures
- Structure of the OIG Report
Chapter II: Oscar Danilo Blandon
- Background of Blandon
- DEA Investigation of Blandon
- FBI Investigation of Blandon
- DEA and FBI Cooperation in the Blandon Investigation
- Los Angeles Sheriff's Department Investigation of
Blandon
- Los Angeles Sheriff's Department Affidavit in Support of the Search
Warrants
- Execution of the Search Warrants
- Search of Blandon's Residence
- Search of Ronald Lister's residences
- Search of Roberto Aguilar's residence
- Issues Regarding the Search
- Allegation that federal authorities impeded the LASD investigation
- Allegation that Blandon was tipped off about the warrants
- Allegation that drugs were planted and money stolen during the search
of Blandon's residence
- Allegation concerning CIA interference in the Los Angeles Sheriff's
Department investigation
- Lister's statements
- Statements by Blandon's attorney
- Allegation that evidence obtained during the searches was taken by
federal authorities from the Los Angeles Sheriff's Department
- Allegation concerning dismissal of drug possession charges against
Blandon and his wife
- The Initiation of the Federal OCDETF Case
- Background to the OCDETF case
- Meeting with Assistant District Attorney Susan Bryant-Deason
- Approval of the OCDETF Case
- The 1987 Los Angeles OCDETF Investigation
- Investigative Steps
- Confidential Informants
- FBI Informants
- Norwin Meneses
- Meneses agrees to cooperate with DEA
- Meneses and DEA Informant in California
- Reaction from other law enforcement authorities concerning the use
of Meneses
- Agreement concerning Meneses
- Attempts to get Meneses and DEA informant back to California
- Closure of the OCDETF Case
- Transfer of the Case
- Assessment of the OCDETF Investigation
- Allegation that Blandon received special treatment
in the 1992 San Diego prosecution of him
- Background
- Initial Phase of the Investigation
- Allegations Regarding Blandon's ties to the Contras and the CIA in
the San Diego OCDETF Investigation
- Blandon's Arrest at the Border
- Blandon's 1991 Arrest in Los Angeles
- The Indictment
- 8. Blandon's Drug Trafficking Information
- Blandon's Post-Cooperation Statements Regarding the Contras and the
CIA
- The Written Plea Agreement
- Blandon's Sentencing
- The Rule 35 Motion
- Disposition of Charges Against Blandon's Co-Defendants
- OIG Conclusions on the Allegation that Blandon Received Special
Treatment Because of Alleged Ties to the CIA and the Contras
- Blandon's Improper Receipt of a Green Card
- Background
- Blandon Obtains his Green Card
- Tellez's Motivations in Securing Blandon's Green Card
- The Receipt of Green Cards by Blandon's Wife and
Daughter
- DEA Payments to Blandon
Chapter III: Norwin Meneses
- Introduction
- Background of Meneses
- First reports on Meneses
- DEA Investigations of Meneses, 1980-1986
- Smith's investigations
- Allegation that Smith's investigations of Meneses were inexplicably
halted
- More DEA investigations of the Meneses organization
- The FBI and United States Attorney's Office
Investigation of Meneses
- Allegations About the Investigations
- "David Morrison"
- Alleged DEA Corruption
- DEA's use of Meneses as an informant
- Meneses' offer to cooperate and the 1987 Los Angeles OCDETF
investigation
- Continued use of Meneses by the Costa Rica DEA
- Indictment of Meneses in 1989
- Post-Indictment Activities
- DEA's use of Meneses as an informant in 1989
- FBI Efforts to Locate Meneses
- Costa Rica DEA reactivates Meneses
- Continued investigations of Meneses
- San Francisco Case
- Guatemala Case
- Meneses' contact with Costa Rica DEA in 1991
- Meneses' 1991 Arrest in Nicaragua
- Allegation that DEA Attempted to Use Meneses Against
the Sandinistas
- Status of 1989 indictment
- Meneses' entries into the United States
- Conclusions Regarding Investigation of Meneses
Chapter IV: OIG Analysis of Allegations
Regarding Blandon's and Meneses' Relationship with the Contras and the CIA
- OIG Review of Sources of Allegations
- Defense Arguments in Los Angeles Big Spender Case
- OIG Review of Records Seized During 1986 Search of Blandon's
Residence
- Allegation that Blandon Alluded to CIA Involvement in 1994 Grand Jury
Testimony in San Francisco
- Information Recorded by Law Enforcement Authorities
- Claims by Ivan Torres
- DEA Suspicion of Meneses' Ties to CIA
- FBI Suspicion of Meneses' Ties to CIA
- Allegations from Other Sources
- Allegations by OIG Source-1 and Rafael Cornejo
- Allegations by "David Morrison"
- Allegations by Michael Ruppert
- OIG Investigation Regarding Support of the Contras
by Blandon and Meneses
- Blandon's Version
- Meneses' Version
- Contra Leaders
- Blandon's Associates
- FBI Los Angeles Informant
- Ivan Torres
- Carlos Rocha
- Meneses' Associates
- DEA Informant
- Renato Pena
- Jairo Meneses
- Tony Navarro
- Enrique Miranda-Jaime
- Other DEA Informants
- Conclusions
Chapter V: Ronald Lister
- Background of Lister
- Lister's Dealings with Blandon, Meneses, and the
Contras
- Reports of Lister's CIA Affiliation in Connection
with the 1986 LASD Search Warrants
- Lister's Alleged Foreknowledge of the LASD Warrants
- Lister's Claims of a CIA Connection
- Documents Seized by the LASD
- Lister's Claims of CIA Affiliation Gathered by the
FBI in 1986-1987
- Lister's Guilty Plea to Tax Charges
- Orange County Prosecution of Lister
- The 1990 San Diego Prosecution
- Claims of CIA Affiliation While Lister Was
Cooperating
- More Allegations by Lister Regarding the CIA at the
Time of His Sentencing
- Lister's Appeal of His Sentence and Release
- David Scott Weekly
- OIG interview of Weekly
- Federal Investigative Files on Weekly
- Timothy LaFrance
- Conclusions
Chapter VI: Ricky Ross
- Ross' Criminal History
- Ross' Statements about his Drug Empire to the Media
and OIG
- The Roles of Ross and Blandon in the Spread of Crack
- When Did Blandon Begin Selling Cocaine to Ross?
- How much cocaine Did Blandon Sell to Ross?
- Availability of Cocaine in South Central Los Angeles
- Was Ross the first Los Angeles drug dealer with a Colombian supplier?
- Were Ross and Blandon Responsible for the Spread of Crack Cocaine in
Los Angeles?
- Did Ross and Blandon Spread Crack Across the Country?
- Law Enforcement Investigations of Ross
- The Freeway Ricky Task Force
- Ross in Cincinnati
- Other Investigative Files and Cases on Ross
- Ross' Arrest on Federal Charges in Cincinnati
- Background of Investigation
- Ross' Guilty Plea in Cincinnati
- Ross' Cooperation in Los Angeles Corruption Trials
- The Texas Case
- Media Attention After Ross' Release from Prison
- The 1996 Case against Ross in San Diego
- Background
- Indictment and Information
- Government Disclosures to Defense Counsel
- The Government Case
- The Defense Case
- Conviction and Sentence
- OIG Analysis of Ross' Allegations
- Allegation that Ross Was Improperly Targeted Before He was Released
From Prison Because of His Prior Testimony Against Corrupt Police Officers or Because of
Racism
- Allegation of Improper Targeting of Ross Before Release from Prison
- Allegation that Blandon targeted Ross because of racism
- Allegation that the Government Prevented Ross from Raising the CIA
Issue at Trial
- Allegation that Ross was Not Guilty Because of Blandon's Affiliation
with the Contras and the CIA
- Allegations of Brady Violations
- Two additional post-trial matters
- Allegation that Ross was just a "little fish"
Chapter VII: Enrique Miranda-Jaime
- Background
- Miranda's Drug Trafficking for the Sandinistas
- Miranda's First Contact with United States Government
- Allegations of Contra Drug Trafficking
- Miranda's Version
- Documentary Evidence
- OIG Conclusions as to Miranda's Credibility
- Miranda's 1991 Arrest
- Miranda Escapes From Prison and Obtains a Visa
- Miranda's Entry into the United States and Return to
Nicaragua
- Conclusions
Chapter VIII: Julio Zavala
- Background to the Frogman Case
- The Investigation
- The Arrest of Zavala and Seizure of $36,000
- Disposition of Charges Against Zavala
- Allegations of Zavala's Connections to the Contras
and the CIA
- First Mention of the Contras in the Zavala Case
- Defense Motion to Conduct Depositions in Costa Rica
- Authenticity of Aviles and Rappaccioli Documents
- Ruling on Defense Motion
- Allegations in Declaration Regarding CIA
- Preparations to Take the Depositions in Costa Rica
- Unsealing of Defense Motion
- Allegation that the Return of the Seized Money to
Zavala Was Caused by Intervention from the CIA
- CIA Documents
- Interviews of CIA Personnel
- Interviews of Department of Justice Personnel
- Interview of Zavala's Defense Counsel
- Allegations in 1986 Newspaper Article Regarding the
Return of the Money
- The San Francisco Examiner Article
- U.S. Attorney Russoniello's letter to the editor
- OIG Conclusions Regarding the Return of the Money
- The Return of the Money
- Zavala's Version
- Salomon's Version
- Aviles' Version
- Zavala's Mother-in-law's Version
- Did the Money Belong to the Contras?
Chapter IX: Carlos Cabezas
- Cabezas' Allegations Concerning the "Contra
Cocaine Connection"
- Cabezas' Allegation Concerning the CIA
- Cabezas' Earlier Claims
- FBI Investigation of Cabezas' Claim About a
"Contra Cocaine Connection"
- OIG Investigation of Cabezas
- Source 1
- FBI Special Agent David Alba
- Assistant U.S. Attorney Mark Zanides
- Other Government Personnel
- Julio Zavala
- Troilo Sanchez
- Fernando Sanchez
- Doris Salomon
- Horacio Pereira
- Assessment of Cabezas' "Contra Cocaine
Connection" Allegations
- Inconsistencies in Cabezas' Allegations Over Time
- Other Concerns Regarding Cabezas' Allegations
- Cabezas' Drug Ledger
- Assessments of Cabezas' Credibility
- OIG Conclusions on the "Contra Cocaine
Connection" Allegations
Chapter X: Celerino Castillo
- Background
- Castillo's Allegations
- Castillo's Allegation Concerning Ilopango Airport
- Investigation of Walter Grasheim
- DEA Reports on Grasheim
- OIG Interviews related to the Grasheim case
- Felix Rodriguez
- Edwin Corr
- Abraham Azzam
- Robert Stia
- Richard Rivera
- Walter Grasheim
- Closing of the Grasheim case
- Investigation of Carlos Amador
- CIA information
- DEA Information
- DEA Headquarters' Review of Allegations of Contra
Drug Trafficking
- Castillo's Later Interaction with Salvadoran
Personnel
- OIG Interviews of other DEA and Embassy Personnel
- Castillo's Allegation regarding a CIA employee
- Castillo's Allegation Regarding the CIA's use of
informant STG6
- Castillo's Recent List of Relevant Files
- Allegation that the DEA Retaliated Against Castillo
- Castillo and the Office of Independent Counsel
- OIG's Evaluation of Castillo's Allegations
Chapter XI: DEA's Response to Information
About Contra Drug Trafficking And Miscellaneous Case
- Introduction
- General Relationship between DEA and CIA During the
Period of the Contra Revolution
- Headquarters Level
- The 1982 Memorandum of Understanding Between the CIA and the
Department of Justice Regarding Crimes Reporting
- DEA/CIA Interaction in Costa Rica
- Information the CIA Gave DEA in Costa Rica
- Conclusions
- Classified Memoranda from CIA to DEA on Drug
Trafficking by the "Southern Front" Contras
- Other CIA Information
- Information Passed By CIA Regarding Jorge Morales,
Adolfo "Popo" Chamarro, and Roberto "Tito" Chamarro
- Fiers' Memorandum
- DEA's Response
- DEA Intelligence Section's Debriefing of Morales
- quot;Follow-Up" by DEA Field Offices
- Other Actions by DEA
- OIG Conclusions
- DEA's Investigation of Information It Received About
Contras or Contra Sympathizers
- Information about Contras in General
- Informant Information Received by the DEA
- OIG Conclusions
- John Hull
- Allegations Reviewed
- DEA Investigation of Drug Smuggling Allegations
- Investigation of Allegations that Hull Defrauded the Overseas Private
Investment Company
- Allegation that a DEA Agent helped Hull Flee Costa Rica
- The Justice Department's Actions Regarding the Costa Rican
Extradition Request
- Jose Orlando Bolanos
Chapter XII: Conclusions
Appendix A: Background on United States Funding
of the Contras
Appendix B: Production of Cocaine Hydrochloride
and Cocaine Base
Appendix C: History of Cocaine
Appendix D: Enrique Miranda's Entry Into the
United States and Return to Nicaragua.
Appendix E: Timelines for Blandon, Meneses,
Lister, Ross, Miranda, Zavala/Cabezas, Castillo
Appendix F: Glossary
#####