Michael R. Bromwich Inspector General, U.S. Department of Justice
House Permanent Select Committee on Intelligence
The Office of the Inspector General report entitled The CIA-Contra-Crack Cocaine Controversy: A Review of the Justice Department’s Investigations and Prosecutions
May 25, 1999
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Mr. Chairman, Congressman Dixon, and Members of the Permanent Select Committee on Intelligence:
I appreciate the opportunity to appear before the Committee to discuss my office’s report entitled The CIA-Contra-Crack Cocaine Controversy: A Review of the Justice Department’s Investigations and Prosecutions. Our 407-page report was completed in December 1997. It was the result of an exhaustive 15-month investigation into allegations that first appeared in August 1996 in a series of newspaper articles published by the San Jose Mercury News. Those articles, entitled “Dark Alliance: The Story Behind the Crack Explosion,” alleged that certain individuals associated with the Nicaraguan Contras had flooded South Central Los Angeles with cocaine in the 1980s. The articles further alleged that these individuals had used the proceeds from their drug trafficking to finance the Contras’ war against the Sandinista regime in Nicaragua. The articles suggested that these individuals helped spark the crack epidemic in Los Angeles and throughout the United States. More explosively, the stories implied that the Central Intelligence Agency (CIA) was aware of these individuals’ activities and either attempted to protect their drug dealing on behalf of the Contras or at a minimum turned a blind eye to it. The articles also suggested that these individuals were treated leniently by law enforcement authorities, including agencies of the Department of Justice, such as the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the Immigration and Naturalization Service (INS), and various United States Attorneys’ Offices, because of their ties to the Contras or the CIA.
The Mercury News articles specifically focused on the drug operations of Ricky Ross, a major cocaine dealer in South Central Los Angeles and elsewhere. The series claimed that Ross’ meteoric rise as a drug trafficker was made possible by Oscar Danilo Blandon and Norwin Meneses, two Nicaraguans with ties to the Contras, who allegedly used the profits they earned from selling Ross massive amounts of cocaine to help fund the Contra war effort. The articles also discussed other drug traffickers, such as Julio Zavala and Carlos Cabezas in Northern California, who allegedly were trafficking in drugs with the tolerance or protection of federal government agencies because of their ties to the Contras.
The news media picked up on the insinuations in the articles and widely reported the claims of government involvement in the crack epidemic. Despite subsequent disclaimers from the Mercury News, the accusation of government involvement took root, particularly in African-American communities that had suffered the ravaging effects of the crack explosion.
Allegations of drug dealing by Contra supporters in the 1980s were not new. In the 1980s, various government entities, the press, and Congress conducted investigations about these subjects. What was new and particularly significant about the Mercury News articles was their suggestion that the CIA and other agencies of the U.S. government may have been responsible for the crack epidemic that affected Los Angeles and other communities throughout the country.
The Mercury News articles created a firestorm of controversy and spawned calls by many government officials and individuals for a thorough investigation of its claims. As a result of the significant controversy these articles generated and the importance of the issues to many people, I agreed that my office would conduct this review. Our review did not reinvestigate the general historical allegations of Contra involvement in drug trafficking. Rather, we decided to focus our investigation on the new allegations raised by the Mercury News, and we concentrated our inquiry on the actions of the Department of Justice that were implicated by the articles. In particular, we concentrated on Ricky Ross, Danilo Blandon, Norwin Meneses, and other individuals whose conduct was the focus of those articles. The articles contained numerous allegations concerning whether Department of Justice employees, including DEA, FBI, INS, and U.S. Attorney’s Office employees, had properly and diligently investigated and prosecuted these individuals, or whether these individuals were protected or treated differently because of their ties to the Contras or pressure from the CIA.
As you know, the CIA’s Office of Inspector General (CIA OIG) undertook its own investigation regarding allegations of drug trafficking on behalf of the Contras. We did not probe the actions of the CIA – except to the extent they may have affected the Department of Justice’s actions in the cases raised by the Mercury News articles. While we coordinated some aspects of our investigation with the CIA OIG’s investigation, our investigation and the CIA OIG investigation were separate and addressed different issues. The CIA OIG investigation focused on the actions of the CIA employees in connection with drug trafficking and the Contras; our investigation focused on the Department of Justice’s role in the allegations contained in the Mercury News articles.
- The OIG Investigation
Because of the importance we attached to this matter, we devoted considerable resources to a lengthy review. Five attorneys, five investigators, and various support staff worked either full-time or part time on this matter. Several of these attorneys were former federal prosecutors with experience in drug prosecutions. Our team reviewed over 40,000 pages of source documents from Department of Justice components, including the FBI, DEA, INS, the Criminal Division of the Department of Justice, various U.S. Attorneys’ Offices throughout the country, and from other entities. We examined court documents, newspaper articles, and documentary evidence we received that bore on this matter. We reviewed numerous documents from the CIA, which were provided to us by the CIA OIG.
In our investigation, we conducted over 200 interviews of witnesses throughout the United States and Central America. These included interviews of former and current Department of Justice personnel who were involved in the cases at issue in the 1980s. We also interviewed several confidential informants who were connected to the cases against Blandon, Meneses, and others. We interviewed personnel from the CIA. We also interviewed many of the individuals whose conduct was the subject of the articles, including Ross, Blandon, Meneses, Zavala, Cabezas, and several of their associates. Only a small number of people declined to talk with us. Because the OIG does not have testimonial subpoena power, we had no way to compel the testimony of private citizens.
Our investigation was made more difficult because of the number of years that had passed between the events and our review. Many of the witnesses we interviewed had dim or non-existent recollections of the events in question. Some witnesses are now deceased. Some files were difficult to locate or were incomplete. We have no assurance that we uncovered every piece of information relevant to these issues. However, by and large, we received good cooperation from the persons and agencies we contacted, and we were generally able to locate documents and information we requested.
- Summary of Findings
On the whole, our review did not substantiate the main allegations stated and implied in the Mercury News articles. It is clear that certain of the individuals discussed in the articles, particularly Blandon and Meneses, were significant drug dealers who also supported the Contras to some extent. We found conflicting claims about how much money they provided to the Contras, although their financial support appears to have been modest. We did not find that Blandon, Meneses, or the other Contra supporters referred to in these articles received any special consideration or leniency by the Department of Justice because of their relationship to the Contras. While the Department’s investigation of these individuals suffered from a lack of coordination and/or insufficient resources, these efforts were not affected by anyone’s suspected ties to the Contras.
Moreover, we did not find supported the implication that the individuals discussed in the Mercury News articles were connected to the CIA. Nor, with one exception, did we find that the CIA or any other national security entity interceded on their behalf. That exception was the CIA’s intervention in the Zavala case concerning the return of $36,000 seized from him, which I will discuss later.
We also concluded that neither Blandon’s nor Ross’ extensive drug trafficking was the cause of the crack explosion in Los Angeles or the United States, as the articles implied. While Blandon was a major cocaine supplier and Ross was a major distributor, the rise of the crack market, in Los Angeles and across the country, was not the result of a single source or seller.
I will now turn to some of the specific findings of our report. Because of the time limitations, I will only highlight in this statement a few of our specific findings. For a fuller summary of the findings, I refer you to the executive summary to our report; the details of our investigation are contained in our full report.
- Specific Findings
Blandon. Oscar Danilo Blandon, a member of a prominent family in Nicaragua, fled to the United States soon after the Sandinistas came to power in Nicaragua in 1979. In the early 1980s while living in Los Angeles, Blandon began distributing cocaine, originally at the behest of Norwin Meneses to support the Contra movement. Blandon soon began selling large quantities of cocaine on his own for his personal profit. He received his cocaine from various sources and sold it to Ross and others in Los Angeles and elsewhere
Beginning in 1986, Blandon’s drug trafficking activities were investigated by the DEA, the FBI, and the Los Angeles County Sheriff’s Department. A 1986 search of his residence and his associates’ property in 1986 was unsuccessful because Blandon had changed his operations before the search because he correctly believed he was under surveillance. Our review did not substantiate the allegations that the investigations of Blandon were compromised or altered because of any involvement by the CIA. The FBI and DEA opened a drug task force investigation of Blandon in 1987. This too was unsuccessful, partly because of problems of coordination between various law enforcement entities.
In 1990, another federal drug task force investigation was opened against Blandon, eventually resulting in his arrest in 1992. After this arrest, Blandon agreed to cooperate with the government in return for a reduced sentence. He was eventually sentenced to 48 months in prison, based on his substantial cooperation, and his sentence was later reduced to 28 months because of his additional cooperation. While Blandon received a considerable degree of leniency, we found no indication that it was the result of any alleged affiliation with the Contras or the CIA.
Meneses. Norwin Meneses was another Contra supporter who ran large drug trafficking operations in Central America and the United States, primarily in the San Francisco area. While Meneses provided some support for the Contras, his drug trafficking appeared to be motivated not by a desire to aid the Contra cause but for personal profit. The evidence we developed suggested that his role in the Contras was marginal. He appeared to have given relatively insignificant amounts to the Contra cause compared to the money he made in drug trafficking.
Meneses’ drug dealing was investigated by the DEA and the FBI for many years. The DEA vacillated as to whether Meneses should be considered a target or used as an informant against others. At the same time as Meneses was being investigated by the San Francisco FBI, he was being used by the DEA in Costa Rica as an informant against other drug traffickers. Surprisingly, even after Meneses was indicted in 1989 in a case investigated by the FBI in San Francisco, he continued travelling in Central America and the United States on behalf of the DEA as an informant. In 1991 the Nicaraguan National Police arrested Meneses in Managua for drug trafficking. He received a 25-year prison sentence, which was later reduced. He was released from prison in 1997.
Although none of the cases against Meneses resulted in his successful prosecution in the United States, this failure was hardly sinister. We found that it was the result of insufficient resources devoted to the effort against him, problems of coordination and communication between and within law enforcement agencies, and ambivalence on whether he should be considered a target or an informant.
Lister. Ronald Lister was a former police officer who became involved in Blandon’s drug organization in the 1980s. He was eventually arrested by the DEA in 1990 for selling cocaine to an undercover DEA agent. The Mercury News articles suggested that Lister was not prosecuted for his illegal activities until 1990 because of his alleged ties to the CIA or the Contras. We found that Lister routinely made comments to people suggesting that he was affiliated with the CIA, including to the law enforcement officers who searched his house as part of the 1986 raids against the Blandon organization, as well as to the prosecutors who handled his case in 1990. No one credited his claims at the time or changed their actions as a result. We found no evidence that he had such an affiliation. Instead, he sought unsuccessfully to use these claims to talk his way out of the trouble he found himself in with law enforcement authorities.
Ross. Ricky Donnell Ross was a central figure in the Mercury News articles. The articles contained the extreme claim that by virtue of the drugs supplied by Blandon, Ross was the source of the crack epidemic in Los Angeles and throughout the country. In attempting to analyze this claim, we interviewed Ross and Blandon, as well as social scientists and law enforcement officials. We reviewed social science literature, data from law enforcement agencies, and data from federal public health organizations. Based on our review, we concluded that the suggestion that Blandon and Ross were responsible for the spread of crack across the country was unsupported.
By his own admission, Ross was a significant drug dealer who began drug trafficking in 1981 or 1982. Blandon later began supplying Ross with cocaine. Initially, the amounts Blandon supplied to Ross were small but increased over time, particularly after Blandon gained access to a Colombian supplier. However, according to both their estimates, the amount of cocaine they trafficked, while undoubtedly massive, was not enough to spark the crack epidemic and represented only a small amount of the cocaine in the United States. Moreover, while Blandon was certainly a major supplier for Ross, there were others. Ross was also not the first crack dealer in Los Angeles, and others competed with him. Ross’ own account of the quantities of cocaine he sold in different cities demonstrates that the amounts were not significant enough to have created the crack crisis there and that crack was already readily available when he began supplying it.
Pinpointing the manner in which crack spread across the United States is an extraordinarily difficult enterprise. Attributing such a complex development to a single drug trafficking group is simply not consistent with the available evidence. In short, although Ross and Blandon certainly contributed to the crack epidemic in South Central Los Angeles and elsewhere, we did not find that they were responsible for it.
We also examined the investigations and prosecutions of Ross by law enforcement authorities. A task force of local law enforcement officers targeted Ross in Los Angeles in 1987, but their efforts were unsuccessful, partly because of misconduct by members of the task force. Ross moved to Cincinnati in 1987 and was indicted by a federal grand jury there in 1989. Ross pled guilty and received a substantially reduced sentence because of his cooperation in the prosecution of corrupt task force officers in Los Angeles.
After Ross was released from federal prison in 1994, he became the subject of a DEA investigation. Ross was arrested in 1995 when he attempted to sell 100 kilograms of cocaine to an undercover DEA officer. Ross had negotiated that deal with Blandon, who was cooperating with the DEA at this time. At trial, Ross contended that he was improperly targeted and entrapped by the government, but he was convicted after a jury trial. He received a mandatory life sentence under the “three strikes” statute because of two prior felony convictions. Recently, we were informed that the federal appellate court has remanded his case for resentencing because of his claim that two of his prior convictions were related and should have been counted as a single conviction for purposes of determining whether a life sentence was mandatory.
An important issue raised in this matter was the disparity of sentences received by Blandon and Ross. Ross claims that he was a “little fish” who received a life sentence for his drug dealing, while Blandon was a “big fish,” a high-level supplier of cocaine, who received a light punishment. Ross also suggested a racial motivation to explain why Blandon received more lenient treatment. While such a claim is often difficult to confirm or refute, it is not accurate to describe Ross as a “little fish.” Both Blandon and Ross were major distributors of cocaine, similar to the relationship between a wholesaler and a major retailer in a legitimate business. The reason for the disparity in the sentences they received was the substantial cooperation that Blandon provided the government. Ross did not provide such valuable cooperation. The decision to give the very substantial sentencing reduction to Blandon was the result of the collective assessment of law enforcement agents, prosecutors, and the sentencing judge regarding the quantity and quality of Blandon’s cooperation. Although we recognize that the benefits received by Blandon were enormous, and although legitimate questions can be raised about whether his rewards were too large given the magnitude of his own narcotics trafficking, we found no basis to doubt the good faith of the law enforcement personnel who made this assessment. This case highlights the enormous power that prosecutors have to make such determinations, which applies to a broad range of cases extending well beyond those addressed in our report.
Zavala. Julio Zavala was arrested in 1982 along with over 50 defendants in what became known as the Frogman case because some of the defendants were arrested in wetsuits while bringing cocaine ashore from a Colombian vessel in San Francisco Bay. When Zavala was arrested at his residence, approximately $36,000 in cash was seized. Zavala filed a motion for the return of the $36,000, contending that it was not the proceeds of his drug trafficking but had been given to him by two Contra leaders in Costa Rica to support their cause.
Depositions of the two Contra leaders in Costa Rica were scheduled. The CIA mistakenly believed that one of the persons to be deposed was a former CIA asset. An attorney in the CIA’s general counsel’s office met with the Assistant United States Attorney handling the case in San Francisco. Subsequently, the depositions were canceled and the money returned.
Recollections as to why the money was returned were hazy and conflicting, and it was not possible for us to determine why the money was returned. CIA records suggest that the money was returned because of the CIA’s request. The Assistant United States Attorney’s supervisors, including the U.S. Attorney, said they did not remember any contact with the CIA about the return of Zavala’s money. They said that the money was returned because it was not cost effective to travel to Costa Rica to take depositions and litigate the issue over $36,000. In any event, the return of the money did not affect the criminal prosecution of Zavala, who was convicted and received a sentence of ten years in prison.
Other cases. Our report describes various other cases that were raised in the Mercury News articles and our findings regarding them. For example, we discuss the case of Carlos Cabezas, one of Zavala’s co-defendants in the Frogman case, who was also convicted of conspiracy to distribute cocaine. In interviews with the OIG, he alleged that he and Zavala smuggled cocaine into the United States in 1981 and 1982 on behalf of the Contras, and that the CIA approved of this enterprise. We did not find his claims credible, and we found no evidence that the prosecution of Cabezas was anything less than aggressive, despite his claims of ties to the CIA.
We also examined claims of Celerino Castillo, a former DEA agent who made various allegations in a book he wrote, such as the claim that his investigation of Contra drug smuggling from the Ilopango Airport in El Salvador was stymied by U.S. government authorities. We found it difficult to evaluate his claims because of their general nature, the passage of time, and his refusal to be interviewed by us except under unacceptable conditions. We found that while some of his factual allegations had a kernel of truth, the broad claims he made about a conspiracy by the CIA and the Contras concerning drug trafficking were not supported.
In sum, we devoted substantial resources to investigating the allegations suggested by the Mercury News articles. The allegations contained an extremely volatile mixture, linking the activities of the CIA, support for the Contras, the crack cocaine explosion, and the devastation of our inner cities by the crack epidemic. More relevant to our inquiry, the allegations suggested that the foreign policy objective of aiding the Contras resulted in the manipulation of the criminal justice system, the protection of certain individuals by the CIA, and the failure of the Department of Justice to pursue investigations and prosecutions of these persons even though they were engaged in substantial drug trafficking activities.
We concluded that the main allegations suggested by the Mercury News articles were unsubstantiated. We found that the investigations of many of the persons named in the articles suffered from various problems, but the successes and failures of these investigations were determined by the normal dynamics that affect many investigations of drug traffickers. These factors include the availability of credible information, the ability to penetrate these organizations with informants, the availability of resources to pursue complex investigations, the communication and coordination between law enforcement entities, and the aggressiveness and judgments of law enforcement agents and prosecutors. Such factors, rather than anything as extraordinary as efforts by the CIA or others to protect the drug trafficking activities of these Contra supporters, determined the outcome in these cases we examined.
To be sure, we did find some problems or ambiguities in the matters we examined. We found that Blandon received a green card improperly while he was cooperating with the government. We found that the Justice Department vacillated about whether Meneses should be prosecuted or used as a cooperating witness. We found the CIA intervened in the Zavala case to permit the return of seized money to him. We highlighted the concerns about the substantial benefits that are provided to some government cooperators, such as Blandon, while others did not receive such a benefit.
- Delay in Release of the OIG Report
Finally, I want to briefly describe the reasons for the delay in the release of our report, which was completed in December 1997 but not released until July 1998. I detail these reasons for this delay in the Epilogue to the report.
I had planned to publicly release our report when it was completed in December 1997. Before its completion, I sent copies of the draft report to the DEA, the FBI, the Criminal Division of the Department, and U.S. Attorney’s Office for the Southern District of California (USAO) for comments regarding the report and the public disclosure of informant or other law enforcement information. I learned that there was objection to our release of information about Blandon’s past cooperation with the DEA, because the DEA had reactivated Blandon as an informant in September 1997 to assist with an investigation of international drug dealers. According to the DEA, Blandon had told the drug dealers that he had cooperated with the U.S. government in the case against Ricky Ross but not against anyone else. As disclosed in our report, Blandon had provided assistance to the government in investigations of many drug traffickers.
We discussed these issues with the DEA, the Criminal Division, and the USAO, who argued that release of the report would jeopardize the viability of their investigation using Blandon. We pointed out that many of the details of Blandon’s past cooperation were already part of the public record, that the issue of Blandon’s past cooperation was critical to the issue of his sentencing, and that the report dealt with a matter of substantial public interest. In the end, the Deputy Attorney General recommended that release of our report be deferred while the DEA pursued its investigation, and the Attorney General accepted that recommendation. She therefore invoked her authority under the Inspector General Act to delay the release of our report based on these law enforcement concerns.
In July 1998, the Attorney General determined that “the law enforcement concerns that caused me to make my determination no longer warrant deferral of the public release of your report.” We therefore released our report publicly on July 14, 1998, with no changes from the original.
The Attorney General’s Decision to delay the release of our report gave rise to some groundless speculation that the Department was trying to suppress our findings and conclusions. That was never an issue. The Attorney General’s decision was based on an assessment of the importance of the DEA’s investigation, Blandon’s role in that investigation, and safety issues with respect to Blandon versus the benefit of timely release of a report that addressed a topic of significant public concern. The full report was ultimately released without any changes whatsoever from the original.
I would be pleased to answer any questions.