V. Ronald Lister

Ronald Lister is a former police officer in Southern California who opened a security business after leaving the police department in 1980. According to Lister, his business provided physical security both in the United States and abroad, and he also attempted to sell weapons in the United States and abroad. In the early 1980s, he met Blandon in Los Angeles and trafficked drugs with Blandon's organization. Through Blandon, Lister attempted to sell weapons to the Contras.

The Mercury News articles suggested that Lister was not investigated for his illegal activities in the mid-1980s because of alleged ties to the CIA and the Contras, and that when he was ultimately prosecuted for his drug trafficking activities, he received inappropriately lenient treatment. As noted above, Lister's residence was searched during the 1986 LASD raids of the Blandon organization, and documents were seized concerning Lister's activities. We found that these documents largely corroborate his account that he was seeking to sell military and security equipment and weaponry to the Contras and factions in El Salvador. However, we found no evidence that he was successful in this venture. Moreover, apart from the fact that Lister's link to the potential Contra market for his weapons was through Blandon, Lister's drug trafficking activities do not appear to have been conducted for the benefit of the Contras.

We also found that Lister made comments to the deputy sheriffs who searched his home in the 1986 raids concerning an alleged affiliation with the CIA. We did not find that he had any such affiliation. Rather, such comments were part of a pattern of deception that Lister engaged in for years when attempting to shield his illegal activities.

We found that Lister's claims of a CIA connection did not affect how he was treated by law enforcement authorities and that he did not receive any benefit or protection because of his alleged ties to the Contras or the CIA. Lister was not prosecuted in 1986 after the LASD raids because no drugs or illegal weapons were found in the search. The IRS nevertheless pursued a tax case against Lister, eventually resulting in his conviction in 1991.

In addition, in 1990 Lister was arrested by the DEA for selling cocaine to an undercover DEA agent. As a result of this arrest, he agreed to plead guilty to a drug charge and cooperate with the government against Blandon and others. But Lister was rearrested after he was released on bail and the government discovered that he was continuing to engage in illegal activities. Lister again claimed an affiliation with the CIA in an attempt to obtain a reduced sentence. He also alleged that the government was not prosecuting the people Lister identified as drug traffickers because of "national security" and political reasons. The prosecutors refused to agree to any reduction in his sentence, as he requested, labeling his claims ridiculous. We also found no substance to these claims.

In an interview with the OIG, Lister initially denied ever claiming any CIA affiliation, then admitted claiming such an affiliation in the past in an attempt to get law enforcement authorities to "back off." Lister's admission to us about the falsity of his claims was consistent with the information we received from many of the people whom we interviewed about Lister, including the law enforcement authorities who investigated and prosecuted him. They labeled him as a con artist and told us that they did not take him or his claims of CIA affiliation seriously.

VI. Ricky Ross

Ricky Ross was a central figure in the Mercury News articles. The articles suggested that, because of drugs supplied to Ross by Blandon, Ross was the source of the crack epidemic in Los Angeles and perhaps throughout the country. The articles also suggested that crack cocaine was not available in South Central Los Angeles until Blandon and Ross brought it there and that Ross established the first ties between dealers in South Central Los Angeles and Colombian suppliers.

In attempting to analyze these claims, we interviewed many of the subjects of the articles, including Ross and Blandon. We talked to social scientists and law enforcement officials, and we reviewed social science literature, data from law enforcement agencies, and data from federal public health organizations in order to understand Ross' and Blandon's roles in the emergence of crack. Based on our review, we concluded that the facts do not support the suggestion in the articles.

It appears that Ross became involved in drug trafficking in 1981 or 1982. Blandon probably began supplying Ross with cocaine in late 1983 or early 1984. The amount that Blandon initially supplied Ross was small, but increased over time, particularly after Blandon gained access to a Colombian supplier around 1985. We could not determine with precision how much cocaine Ross sold in total, or how much Blandon provided to Ross, since their estimates varied widely. However, during Ross' testimony at a trial in 1991, he estimated that he sold roughly 2,000 to 3,000 kilograms (approximately two to three tons) over the seven-year period he dealt drugs. Blandon estimated in a conversation with an informant that he sold 2,000 to 4,000 kilograms of cocaine to black drug dealers. While these estimates involve a massive amount of drugs, it clearly was not enough to spark the crack epidemic. To put it in perspective, the DEA estimated that 44 tons of cocaine entered the United States in 1980 alone, and 40 to 48 tons in 1981, well before Blandon began supplying Ross.

Furthermore, there were many cocaine traffickers who dealt in larger quantities of cocaine than Ross. Ross was not the first crack dealer in Los Angeles, and he admitted that a number of dealers competed with him there. Ross also was not the only dealer in Los Angeles with a Colombian connection. In addition, Blandon was selling cocaine to Ross at generally prevailing rates for cocaine, not significantly discounted prices as suggested by the Mercury News. By the time that Ross' operation reached its peak -- in 1985 according to Ross -- crack was prevalent in South Central Los Angeles and many other dealers were vying for a share of this market. In short, although Ross and Blandon certainly contributed to the crack epidemic in South Central Los Angeles, we did not find that they were singularly or primarily responsible for it.

Ross told the Mercury News that, "I'm not saying I wouldn't have been a dope dealer without Danilo [Blandon]," but claimed he would not have been as big a dealer. This is far from clear. Blandon was certainly a major supplier for Ross, but there were plenty of others. Ross was an ambitious entrepreneur who thrived in optimal market conditions: the Colombian cocaine glut had reduced cocaine prices, and crack was well-suited for cheap, easy production and simple, ready-to-use distribution. These factors were more responsible than anything else for the rise of crack cocaine, and they were not a creation of Ross, Blandon, or any other individual.

With regard to the suggestion in the Mercury News that Blandon and Ross were responsible for the spread of crack cocaine across the country, we concluded that this is pure hyperbole. It is not possible to pinpoint the manner in which crack cocaine spread throughout the United States, and any efforts to explain this so simply are dubious. Experts still do not agree on where crack originated or the cause of its rise. In addition, Ross' own accounts of the quantities of cocaine he sold and when he sold it in different cities reveal that the amounts were not significant enough to have created a crack crisis in those cities and that crack was already available when he began to supply it.

We also examined the investigations and prosecutions of Ross by law enforcement authorities. Ross was initially investigated by the LASD and local police, who established a task force targeting him in 1987, which became known as the "Freeway Ricky Task Force." Their efforts to prosecute Ross were unsuccessful because of misconduct by members of the task force. As a result of their investigation, however, Ross decided to move to Cincinnati in 1987.

Ross continued to deal drugs from Cincinnati, and a number of jurisdictions pursued investigations of him. In 1989, he was indicted on federal drug charges in Cincinnati. He pled guilty to a drug conspiracy count and agreed to cooperate with authorities in Los Angeles who were prosecuting LASD deputy sheriffs for corruption. Ross testified at a trial against the deputy sheriffs in Los Angeles in 1991, but the case ended with a hung jury. Several of the defendants later pled guilty after being offered favorable deals. As a result of his testimony in the corruption trial, Ross received a substantial reduction in his sentence -- he was sentenced to 51 months in prison rather than the 121 to 151 months specified by his plea agreement.

Ross was also convicted on state drug charges in Texas while serving his federal sentence, and he served an additional nine months in a Texas prison after finishing his federal sentence. Ross was paroled from the Texas prison in September 1994.

In March 1995, Ross was arrested in San Diego by the DEA when he attempted to sell 100 kilograms of cocaine to an undercover DEA officer in a deal Ross negotiated with Blandon, who was cooperating with the DEA. According to testimony at trial, Ross was targeted by the DEA after his release from prison when he contacted Blandon and sought to arrange a cocaine purchase. Ross' defense at trial was that he was entrapped by the government. The jury rejected his defense and convicted him. Because of the quantity of drugs Ross had sought to purchase, and because of Ross' two prior felony drug convictions in Cincinnati and Texas, he received a mandatory sentence of life in prison.

Ross claims that he was improperly targeted and arrested by the government in retaliation for his cooperation in the 1991 corruption trial against the Los Angeles deputy sheriffs. As evidence of this, Ross stated that he was targeted by the DEA before he was even released from prison in September 1994. Our review did not support this contention, and the trial court also rejected Ross' claim. We found that the DEA did not initiate an investigation on Ross until after he contacted Blandon in October 1994 and indicated that he was interested in purchasing cocaine, shortly after Ross was released from prison.

The Mercury News articles also discussed a motion filed in Ross' trial by the prosecutor to preclude the defense from asserting that the CIA was involved with Blandon's sale of drugs for the Contras. The prosecutor said he filed the motion because he believed the claim had no basis in fact and was merely a calculated effort to deflect attention from the evidence of Ross' drug trafficking. Contrary to assertions in the Mercury News, the court denied the government's motion, stating "I don't see that the national security and the interests of the United States are greatly impinged by this." Ross' counsel did not raise the CIA issue at trial. After Ross' conviction, at the time of his sentencing in 1996, the CIA filed a declaration stating that it had identified no records regarding Ross and no records that the CIA had "any kind of a operational, contractual, or employment relationship with" Blandon, Meneses, or Lister. As discussed previously, we also found that there was no such relationship.

Ross also complained that he was a "little fish" who received a life sentence for his drug dealing, while Blandon was a "big fish" who received a light punishment. Although such claims of disparate treatment are subjective and highly charged, Ross can hardly be called a "little fish." Allegations that Blandon was a large-scale supplier of cocaine are certainly true; allegations that Ross was a simple street-level dealer are not. Blandon and Ross were both big distributors, similar to the relationship between a wholesaler and a major retailer in the legitimate business world.

Ross has also suggested a racial motivation to explain why Blandon received more lenient treatment than he did. While such a claim is often difficult to confirm or refute, we did not find evidence corroborating it. First, we note that Ross himself received a lenient sentence after his arrest in Cincinnati, when he cooperated with the government. Ross said to the OIG: "My whole time in prison I never seen anybody beside myself on the first deal that I got sell as much dope as Danilo and get probably the best deal that anybody ever got in America." (Emphasis added). In addition, according to the prosecutor and the DEA agent handling the Ross case, he was given an opportunity to reduce his sentence by cooperating against other drug traffickers after his arrest in San Diego in 1995, but they assessed his efforts as "self-serving and ineffectual."

In the end, the reason for the disparity between Blandon's and Ross' sentences was that the government moved for a downward departure for Blandon based on his substantial cooperation and made no such motion for Ross. While Blandon greatly assisted the government, Ross did not. We recognize, however, the perception that exists with respect to differing treatment of defendants, and the potential of allegations of bias that can be raised when reduction of sentences are granted to certain defendants but not others. For this reason, many U.S. Attorney's Offices have formed committees to consider whether it is appropriate to recommend reduced sentences, and to ensure that similarly-situated defendants are treated similarly. Such committees take important decisions out of the hands of a single prosecutor and increase the likelihood of equal treatment, as well as the perception of fairness. Although we do not know if the use of such a committee would have resulted in any change in the Ross or Blandon cases, we believe that in general they will result in fairer and more consistent sentencing decisions, as well as enhancing the appearance of fairness.

VII. Enrique Miranda-Jaime

The Mercury News articles found some support for the allegations of Contra drug trafficking and CIA complicity in it from the testimony of Enrique Miranda-Jaime (Miranda). In November 1991, Miranda was arrested in Nicaragua with Meneses for attempting to transport 764 kilograms of cocaine to the United States. Miranda testified at Meneses' trial in Nicaragua that Meneses had financed the Contras with the proceeds from cocaine trafficking. We interviewed Miranda in prison in Nicaragua, who repeated the claim that Meneses had sold cocaine for the Contras, stating also that it was done with the support of the CIA.

Miranda had no direct knowledge of, or ever witnessed, any of the events on which he based his allegations. We were unable to locate any documents that he said supported his claims. Moreover, he did not make claims about the CIA's involvement when he was debriefed by the DEA in 1996 after he had escaped from his Nicaraguan prison, entered the United States, and offered to work for the DEA as an informant. Our assessment of his assertions was similar to conclusions of the law enforcement officers who came in contact with him: he made provocative claims, without much support, perhaps in an attempt to gain release from prison and gain entry into the United States.

VIII. Julio Zavala

The OIG investigated allegations reported in the Mercury News and elsewhere concerning the return by San Francisco federal prosecutors of approximately $36,000 seized from Julio Zavala, a Nicaraguan drug trafficker who allegedly had ties to the Contras.

In 1982, a federal OCDETF task force targeted a drug trafficking organization in San Francisco. After a lengthy investigation, which included extensive wiretaps, the federal authorities arrested over 50 defendants and seized 555 pounds of cocaine. The case 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. Among the defendants later arrested in this case were Julio Zavala and Carlos Cabezas. At the time of Zavala's arrest, approximately $36,000 was seized from Zavala's residence. Prior to trial, defense counsel filed a motion seeking depositions in Costa Rica to show that the money seized from Zavala was not the proceeds of drug trafficking but had been given to Zavala by the Contras. Along with his motion, defense counsel submitted documents from two individuals who claimed they were Contra officials in Costa Rica and had given Zavala $45,000 to "promote the reinstatement of democracy in Nicaragua" within the United States. The court granted Zavala's counsel permission to take the depositions of individuals in Costa Rica to explore the source of the money.

After the court's ruling, the San Francisco Assistant United States Attorney (AUSA) handling the case took steps to initiate travel to Costa Rica to take the depositions of the two Contra leaders. Through the State Department, the Costa Rica CIA Station learned about the proposed depositions. The Station mistakenly believed that one of the persons to be deposed was a former CIA asset, not the Contra leader who was identified in the document filed by defense counsel. As a result, an attorney in the CIA General Counsel's office met with the AUSA handling the case in San Francisco, after which the depositions were canceled and the money returned to Zavala. According to a memorandum from the CIA attorney, the CIA suggested that the depositions could cause damage to the CIA's image and program in Central America.

Recollections as to why the money was returned were hazy and conflicting. The AUSA said he remembered meeting with the CIA attorney and being told by the CIA attorney that the depositions would create an "uncomfortable situation" and that the CIA would be grateful if the depositions were dropped. The AUSA suggested that the CIA attorney raise the issue with supervisors in the U.S. Attorney's Office. The AUSA's supervisors, including the U.S. Attorney, do not remember any contact with the CIA about canceling the depositions or returning the money. The U.S. Attorney told us that the money was returned not because of any contact by the CIA, but because it was not cost effective to travel to Costa Rica to take the depositions and litigate the issue over $36,000, the same explanation he provided in a letter to the editor of a local newspaper.

The CIA employees involved state that they do not recall having spoken to any representatives of the U.S. Attorney's Office, although this is contrary to documents contained in their own files. CIA records include a document, written by the CIA attorney at the time of the event, stating that the money was returned at the CIA's request.

Based on the conflicting recollections and the lack of contemporaneous documentation about the matter in the U.S. Attorney's Office, it was not possible for us to resolve why the money was returned. It is clear that the CIA believed that it had an interest in preventing the depositions, partly because it was concerned about an allegation that its funds were being diverted into the drug trade. The CIA discussed the matter with the U.S. Attorney's Office, the depositions were canceled, and the money was returned. The exact details of how this came about, and whether the cause was the cost of the depositions -- which was high compared to the amount at stake -- or the CIA's intervention, remain uncertain. In any event, the return of the money did not affect the criminal prosecution of Zavala, which resulted in his conviction and sentence of ten years in prison.

Finally, it was difficult to determine whether the money actually belonged to the Contras or was Zavala's drug proceeds. We concluded, based on the available albeit conflicting evidence, that Zavala or persons acting on his behalf fabricated the claim that it was Contra money rather than proceeds from drug trafficking. We concluded that Zavala engaged in a ploy to salvage some of his drug profits, and the strategy succeeded.