-Caveat Lector- from: http://www.webcom.com/pinknoiz/covert/contracoke.html <A HREF="http://www.webcom.com/pinknoiz/covert/contracoke.html">Nicaraguan Contras and Cocaine</A> --[2]-- VII. THE CASE OF GEORGE MORALES AND FRS/ARDE In 1984, the Contra forces under Eden Pastora were in an increasingly hopeless situation. On May 30,1984, Pastora was wounded by a bomb at his base camp at La Penca, Nicaragua, close to the Costa Rica border. That same day, according to ARDE officer Karol Prado, aid to ARDE from the United States was cut off.[69] Despite continued pressure from the United States, Pastora refused to place his ARDE forces under a unified command with the largest of the Contra organizations--the Honduras-based FDN. The CIA considered Pastora to be "disruptive and unpredictable."[70] By the time the Boland Amendment cut off legal military aid to the Contras, the CIA had seen to it that Pastora did not receive any assistance, and his forces were experiencing "desperate conditions."[71] Although there are discrepancies among the parties as to when the initial meeting took place, Pastora's organization was approached by George Morales, a Colombian drug trafficker living in Miami who had been indicted on narcotics trafficking charges. According to the State Department report to the Congress of July 26, 1986: Information developed by the intelligence community indicates that a senior member of Eden Pastora's Sandino Revolutionary Front (FRS) agreed in late 1984 with (Morales) that FRS pilots would aid in transporting narcotics in exchange for financial assistance...the FRS official agreed to use FRS operational facilities in Costa Rica and Nicaragua to facilitate transportation of narcotics. (Morales) agreed to provide financial support to the FRS, in addition to aircraft and training for FRS pilots. After undergoing flight training, the FRS pilots were to continue to work for the FRS, but would also fly narcotics shipments from South America to sites in Costa Rica and Nicaragua for later transport to the United States. Shortly thereafter (Morales) reportedly provided the FRS one C-47 aircraft and two crated helicopters. He is reported to have paid the sum of $100,000 to the FRS, but there was no information available on who actually received the money.[72] The State Department said it was aware of only one incident of drug trafficking resulting from this agreement between the Contras and Morales and that was the case of Contra pilot Gerardo Duran. Duran was arrested in January 1986, in Costa Rica for his involvement in transporting cocaine to the United States.[73] Duranwas an FRS pilot from 1982 to 1985 and operated an air taxi service in Costa Rica. According to Marco Aguado and Karol Prado, Duran would fly supplies to the Contras on the Southern Front and he would charge for each flight. [74] Robert Owen, courier for Lt. Col. Oliver North, testified to the Iran/Contra Committees that he told North he thought Karol Prado was involved in trafficking drugs out of Panama, and that Pastora's pilot, Marco Aguado, was also involved.[75] The Subcommittee was unable to validate Owen's claims. Prado vehemently denied these allegations stating that he believed the drug trafficking allegations against Pastora were the result of a CIA effort to discredit him.[76] Morales testified that his involvement with the Contras started in 1984 at the urging of Marta Healey, the widow of one of his drug pilots, Richard Healey.[77] Marta Healey's first husband was Adolfo "Popo" Chamorro, the second in command to Eden Pastora in the FRS. She came from a prominent Nicaraguan family. At the time of his first contract, Morales was under indictment for marijuana smuggling. He testified that he thought by assisting the Contra cause his indictment would be dropped. Marta Healey introduced Morales to Popo Chamorro, Marco Aguado and Octaviano Cesar at a meeting in Miami. According to Morales, he wanted to make a deal: He would help the Contras with their needs, and "they in exchange would help me with my objective, which was solving my indictment." Morales believed the Contra leaders would help him solve his legal problems because of their contacts with the CIA.[78] On October 31, 1987 in San Jose, Costa Rica, the Subcommittee videotaped the depositions of three Contra leaders with intimate knowledge of the Morales relationship with Pastora's organization in video depositions. The three were Karol Prado, Pastora's head of communications; Marco Aguado, Pastora's air force chief; and Octaviano Cesar who, along with his brother Alfredo, were political allies of Pastora's at the time. A fourth, Adolfo "Popo" Chamorro, who was Pastora's second in command in ARDE, testified in closed session of the Subcommittee in April 1988. Chamorro's testimony was taken in closed session by the consent of the Subcommittee at his request. Dick McCall, of Senator Kerry's personal staff, in an arrangement worked out with Chamorro and his attorneys, subsequently interviewed him in Miami. Each denied knowing that Morales was under indictment for drug trafficking when they first met him at Marta Healey's house in Miami. Popo Chamorro said that as far as he knew Morales was just another rich Miami resident with strong anti-Communist feelings.[79] In addition, all three denied receiving more than $10,000 in cash from Morales. The Subcommittee found that $10,000 was given to Popo Chamorro to cover the cost of transporting a C-47 owned byMorales, which he donated to ARDE, from Haiti to Ilopango Air Force Base in El Salvador. [80] While denying receiving funds personally, Prado, Aguado and Cesar each confirmed elements of Morales' story. According to Prado, Octaviano Cesar and his brother Adolfo allied themselves politically with Pastora in the Summer of 1984. A decision was then made to send Popo Chamorro and Octaviano Cesar to the United States to look for funds.[81] In September, Popo Chamorro returned to Costa Rica with photographs of a DC-4 and a Howard plane, and told Pastora that they would get six more planes, including a Navajo Panther from George Morales.[82] Pastora told Chamorro that the C-47 was the most practical plane for the Contras at the time and Popo returned to Miami to arrange for its transfer. Chamorro provided the Subcommittee with an aircraft purchase order, dated October 1, 1984. The notarized purchase order provided that for the sum of one dollar, a McDonnell-Douglas DC-3, the civilian designation for a C-47, would be transferred to Marco Aguado. The order was signed by George Morales, as the seller, and by Marco Aguado, as the purchaser. In addition, Chamorro gave the Subcommittee a list of flights made by that C-47 to ferry arms from Ilopango to Costa Rica and La Penca. Between October 18, 1984 and February 12, 1986, some 156,000 pounds of material were moved from Ilopango to air fields in Costa Rica. Of the 24 flights during this period, eleven were to La Penca on the Nicaraguan side of the Rio San Juan.[83] The Subcommittee substantiated key elements of the Morales story, although it did not find evidence that Cesar, Chamorro, or Prado were personally involved in drug trafficking. First, all witnesses agreed that Morales gave ARDE a C-47. Evidence of an association between them is also provided by a Customs document. This document, provided to the Committee by the U.S. Customs Service, shows that Morales entered the United States from the Bahamas on October 13, 1984, with Marco Aguado, Octaviano Cesar and Popo Chamorro. They carried $400,000 in cash and checks which were declared by Aguado, Chamorro and Cesar. They claimed that the checks and money were returned to Morales after clearing Customs.[84] Aguado summarized the relationship between the Southern Front Contras and the drug traffickers in terms of the exploitation of the Contra movement by individuals involved in narcotics smuggling. According to Aguado, the trafficking organizations, "took advantage of the anti-communist sentiment which existed in Central America ... and they undoubtedly used it for drug trafficking." Referring to the Contra resupply operations, Aguado said the traffickers used "the same connections, the same air strips, the same people. And maybe they said that it was weapons for Eden Pastora, and it was actually drugs that would later on go to the U.S.... They fooled people ... Unfortunately, this kind of ac-tivity, which is for the freeing of a people, is quite similar to the activities of the drug traffickers."[85] Octaviano Cesar testified that when he dealt with Morales he was: Thinking in terms of the security of my country. It just didn't enter my mind that I would become involved in such a mess, because it never entered into my mind to get in that [drug] business ... I went a couple of times inside in Nicaragua and I saw people there. Young kids 15, 16 years old, they were carrying 30, 40 rounds of ammunition against the Sandinistas ... And that's why I did it. I'm not proud of it, but I just didn't have any choice. I mean, the U.S. Congress didn't give us any choice. They got these people into a war. The people went inside of Nicaragua, 80 miles inside. They had thousands of supporters, campesinos there helping them ... Now, when those people retreat, those campesinos were murdered by the Sandinistas. I don't want that, but that's the reality of life.[86] In addition, Cesar told the Subcommittee that he told a CIA officer about Morales and his offer to help the Contras. Senator KERRY. Did you have occasion to say to someone in the CIA that you were getting money from him and you were concerned he was a drug dealer? Did you pass that information on to somebody? Mr. CESAR. Yes, I passed the information on about the--not the relations--well, it was the relations and the airplanes; yes. And the CIA people at the American military attache's office that were [sic] based at Ilopango also, and any person or any plane landed there, they had to go---- Senator KERRY. And they basically said to you that it was all right as long as you don't deal in the powder; is that correct? Is that a fair quote? Mr. CESAR. Yes.[87] After the La Penca bombing of May 30, 1984, all assistance was cut off by the CIA to ARDE, while other Contra groups on both fronts continued to receive support from the U.S. government through a variety of channels. The United States stated that the cut-off of ARDE was related to the involvement of its personnel in drug trafficking. Yet many of the same drug traffickers who had assisted ARDE were also assisting other Contra groups that continued to receive funding. Morales, for example, used Gerardo Duran as one of his drug pilots, and Duran worked for Alfonso Robello and Fernando "el Negro" Chamorro, who were associated with other Contra groups, as well as for ARDE.[88] In a sworn deposition which was taken in San Jose Costa Rica by the Subcommittee on October 31, 1987, Karol Prado, Pastora's treasurer and procurement officer, vehemently denied allegationsconcerning the personal involvement of ARDE leadership in drug trafficking. Prado said that because of Pastora's problems with the U.S. government, it was his belief that the CIA was attempting to discredit the former Sandinista Commandante and his supporters in ARDE with allegations that they were involved in drug trafficking.[89] Thomas Castillo, the former CIA station chief in Costa Rica, who was indicted in connection with the Iran/Contra affair, testified before the Iran/Contra Committees that when the CIA became aware of narcotics trafficking by Pastora's supporters and lieutenants, those individuals' activities were reported to law enforcement officials.[90] However, Morales continued to work with the Contras until January 1986. He was indicted for a second time in the Southern District of Florida for a January 1986 cocaine flight to Bahamas and was arrested on June 12, 1986. Morales testified that he offered to cooperate with the government soon after he was arrested, and that he was willing to take a lie detector test. He said his attorneys repeated the offer on his behalf several times, but on each occasion the U.S. Attorney, Leon Kellner, refused. [91] Leon Kellner and Richard Gregorie, then the head of the criminal division of the Miami U.S. Attorney's office, met with the staff of the Committee in November 1986. They said that Morales' story was not credible and that Morales was trying to get his sentence reduced by cooperating with a Senate committee. As Morales had not yet been sentenced, both Kellner and Gregorie discouraged the staff from meeting with Morales at that time, and the staff respected their request. Kellner and Gregorie said that Morales was like the many Miami cocaine traffickers who use the "I was working for the CIA" defense.[92] Following his testimony before the Subcommittee, Morales renewed his offer to work with the government. This time, federal law enforcement officials decided to accept the offer. Morales provided the government with leads that were used by law enforcement authorities in connection with matters remaining under investigation. In November 1988, the DEA gave Morales a lengthy polygraph examination on his testimony before the Subcommittee and he was considered truthful.[93] VIII. JOHN HULL John Hull was a central figure in Contra operations on the Southern Front when they were managed by Oliver North, from 1984 through late 1986.[94] Before that, according to former CostaRican CIA station chief Thomas Castillo's public testimony, Hull had helped the CIA with military supply and other operations on behalf of the Contras.[95] In addition, during the same period, Hull received $10,000 a month from Adolfo Calero of the FDN--at North's direction.[96] Hull is an Indiana farmer who lives in northern Costa Rica. He came to Costa Rica in mid-1970's and persuaded a number of North Americans to invest in ranch land in the northern part of the country.[97] Using their money and adding some of his own, he purchased thousands of acres of Costa Rican farm land. Properties under his ownership, management or control ultimately included at least six airstrips. To the many pilots and revolutionaries who passed through the region, this collection of properties and airstrips became known as John Hull's ranch. On March 23, 1984, seven men aboard a U.S. government owned DC-3 were killed when the cargo plane crashed near Hull's ranch, revealing publicly that Hull was allowing his property to be used for airdrops of supplies to the Contras.[98] But even before this public revelation of Hull's role in supporting the Contras, officials in a variety of Latin American countries were aware of Hull's activities as a liaison between the Contras and the United States government. Jose Blandon testified, f or example, that former Costa Rican Vice President Daniel Oduber suggested he (Blandon) meet with Hull in 1983, to discuss the formation of a unified southern Contra command under Eden Pastora.[99] Five witnesses testified that Hull was involved in cocaine trafficking: Floyd Carlton, Werner Lotz, Jose Blandon, George Morales, and Gary Betzner. Betzner was the only witness who testified that he was actually present to witness cocaine being loaded onto planes headed for the United States in Hull's presence. Lotz said that drugs were flown into Hull's ranch, but that he did not personally witness the flights. He said he heard about the drug flights from the Colombian and Panamanian pilots who allegedly flew drugs to Hull's airstrips. Lotz described the strips as "a stop for refuel basically. The aircraft would land, there would be fuel waiting for them, and then would depart. They would come in with weapons and drugs." Lotz said that Hull was paid for allowing his airstrips to be used as a refueling stop.[100] Two witnesses, Blandon and Carlton recounted an incident involving the disappearance of a shipment of 538 kilos of cocaine owned by the Pereira or Cali cocaine cartel. Teofilo Watson, a member of Carlton's smuggling operation, was flying the plane to Costa Rica for the Cartel. The plane crashed and Watson was killed. The witnesses believed that the crash occurred at Hull's ranch and that Hull took the shipment and bulldozed the plane, a Cessna 310, into the river.Carlton testified that the Colombians were furious when they discovered the cocaine missing. He said they sent gunmen after Hull and in fact kidnapped a member of Hull's family to force the return of the cocaine. When that failed they became convinced that Carlton himself stole the cocaine and they sent gunmen after him. The gunmen dug up Carlton's property in Panama with a backhoe looking for the lost cocaine, and Carlton fled for his life to Miami.[101] Gary Betzner started flying for Morales' drug smuggling network in 1981. Betzner testified that his first delivery of arms to the Contras was in 1983, when he flew a DC-3 carrying grenades and mines to Ilopango Air Force Base in El Salvador. His co-pilot on the trip was Richard Healey, who had flown drugs for Morales.[102] Betzner said the weapons were unloaded at Ilopango by Salvadoran military personnel and an American whom he assumed worked for the U.S. Department of Defense. Betzner testified that he and Healey flew the plane on to Colombia where they picked up a load of marijuana and returned to their base at Great Harbor Cay in the Bahamas.[103] According to Betzner, the next Contra weapons and drugs flight took place in July 1984. Morales asked him to fly a load of weapons to Hull's ranch and to pick up a load of drugs. Betzner flew a Cessna 402-B to John Hull's ranch. According to Betzner, he was met at the airstrip by Hull and they watched the cargo of weapons being unloaded, and cocaine, packed in 17 duffel bags, and five or six two-foot square boxes being loaded into the now-empty Cessna. Betzner then flew the plane to a field at Lakeland, Florida.[104] Yet another guns for drugs flight was made two weeks later. On this trip, Betzner said he flew a Panther to an airstrip called "Los Llanos," about ten miles from Hull's properties and not far from the Voice of America transmitter in northern Costa Rica. Betzner testified that Hull met him again and the two watched while the weapons were unloaded and approximately 500 kilos of cocaine in 17 duffel bags were loaded for the return flight to Florida.[105] Hull became the subject of an investigation by the U.S. Attorney for the Southern District of Florida in the spring of 1985. In late March 1985, Assistant U.S. Attorney Jeffrey Feldman and two FBI agents went to Costa Rica to investigate Neutrality Act violations by participants in the Contra resupply network that were also under investigation at the time by Senator Kerry. Both the Feldman and Kerry inquiries had been prompted in part by statements made to reporters by soldiers of fortune imprisoned in Costa Rica who alleged John Hull was providing support for the Contras with the help of the National Security Council.[106] Feldman and the FBI agents met with U.S. Ambassador to Costa Rica, Lewis Tambs, and the CIA Chief of Station, Thomas Castillo,who told him John Hull knew Rob Owen and Oliver North and gave the impression that Hull had been working for U.S. interests prior to March of 1984. In addition, one of the embassy security officers, Jim Nagel, told one of the FBI agents accompanying Feldman, that regarding Feldman's inquiries, "... these were agencies with other operational requirements and we shouldn't interfere with the work of these agencies."[107] When Feldman attempted to interview Hull, Feldman learned that Hull was told by the embassy staff not to talk to him without an attorney present.[108] Feldman concluded that U.S. Embassy officials in Costa Rica were taking active measures to protect Hull. After Feldman interviewed two of the mercenaries, Peter Glibbery and Steven Carr, regarding their allegations of Hull's involvement in criminal activity, Feldman learned that Kirk Kotula, Consul in San Jose, was "trying to get Carr and the rest of these people to recant their statements regarding Hull's involvement with the CIA and with any other American agency.[109] Feldman added "... it was apparent we were stirring up some problem with our inquiries concerning John Hull."[110] Feldman concluded that because Hull was receiving protection from some US officials, that it would not be possible to interview him. Feldman therefore took no further steps to do so.[111] In an effort to stop the investigation against him and to cause the Justice Department to instead investigate those urging an investigation of Hull, Hull prepared falsified affidavits from jailed mercenaries in Costa Rica to U.S. Attorney Kellner. In the affidavits the mercenaries accused Congressional staff of paying witnesses to invent stories about illegal activities associated with the clandestine Contras supply network. The Justice Department ultimately concluded that the affidavits had been forged. Kellner testified that he "had concerns about them and ... didn't believe them.[112] To this day, the Justice Department has taken no action against John Hull for obstruction of justice or any related charge in connection with his filing false affidavits with the U.S. Justice Department regarding the Congressional investigations. In the period in which he was providing support to the Contras, Hull obtained a loan from the Overseas Private Investment Corporation for $375,000 which ultimately proved to have been obtained with false documentation. In 1983, Hull and two associates, Mr. William Crone and Mr. Alvaro Arroyo approached OPIC for a loan to finance a joint venture wood products factory that would make wheelbarrow and ax handles for the U.S. market. In fact, according to testimony from Crone and OPIC officials, no contributions from Hull, Arroyo or himself were made to the joint venture. On the basis of the applica-tion, some supporting documentation and a site visit, on March 30 1984, OPIC advanced $375,000.[113] By the end of 1985, after one interest payment, the loan lapsed into default, and OPIC officials began to recognize that the project was a fraud, and that Hull had made false representations in making the application to OPIC.[114] OPIC officials found that the money which was disbursed by their Agency was deposited in Hull's Indiana bank account and the funds were withdrawn by Hull in cash. When OPIC inquired in 1986 as where the funds were going, Hull told OPIC officials that he would be using the cash to buy Costa Rican money on the black market to get a more favorable exchange rate.[115] In fact, Costa Rica has a favorable exchange rate for foreign investment and the excuse Hull offered does not make sense. What appears to have happened is that Hull simply took the money, inasmuch as no equipment was purchased for the factory, no products were shipped from it, and Hull's partner, Crone, testified that he never saw the money. Indeed, prospective purchasers complained that they paid Hull for products in advance but never received delivery.[116] On the basis of the subsequent OPIC investigation of the loan to Hull's company, in April 1987, the case was referred to the Justice Department for a criminal fraud investigation.[117] While nothing has yet happened for almost two years, the Justice Department maintains the investigation is still ongoing.[118] OPIC foreclosed on the properties which Hull had put up as collateral for the loan. Following the foreclosure to recover their monies, OPIC sold the property at auction. However, in order to prevent a sale far below the market price, OPIC bid at the auction and wound up purchasing its own property for $187,500. OPIC then attempted to sell the property directly. An advertisement was placed in The Wall Street Journal which attracted a single offer from an investment banker in Philadelphia. An agreement was negotiated whereby the company purchasing the property from OPIC was required to make no down payment, and only to repay OPIC its $187,500 from the future proceeds of the sale of timber cut on the land. The corporation which purchased the property has no other assets other than the land. If the agreement is fulfilled by the purchasers of the land, OPIC will realize repayment of $187,500, half of the original $375,000 loaned to Hull. [119] The Subcommittee also heard testimony investors who had allowed Hull to purchase property for them and then to manage the property, who testified that he did not deliver on his promises, he failed to purchase the properties he said he would, and in one case,took farm equipment off a farm he was paid to manage and converted it for his own use.[120] In mid-January 1989, Hull was arrested by Costa Rican law enforcement authorities and charged with drug trafficking and violating Costa Rica's neutrality. IX. THE SAN FRANCISCO FROGMAN CASE, UDN-FARN AND PCNE The San Francisco Frogman case was one of the first cases in which allegations linking specific Contra organizations to drug smugglers surfaced. In a July 26, 1986 report to the Congress on Contra-related narcotics allegations, the State Department described the Frogman case as follows: "This case gets it nickname from swimmers who brought cocaine ashore on the West Coast from a Colombian vessel in 1982-1983. It focused on a major Colombian cocaine smuggler, Alvaro Carvajal-Minota, who supplied a number of West Coast smugglers. It was alleged, but never confirmed, that Nicaraguan citizen Horacio Pereira, an associate of Carvajal, had helped the Nicaraguan resistance. Pereira was subsequently convicted on drug charges in Costa Rica and sentenced to twelve years imprisonment. Two other Nicaraguans, Carlos Cabezas and Julio Zavala, who were among the jailed West Coast traffickers convicted of receiving drugs from Carvajal, claimed long after their conviction that they had delivered large sums of money to resistance groups in Costa Rica and that Pereira, who was not charged in the case, has said the profits from the drug sale would finance resistance activities."[121] The allegations made by Cabezas and Zavala involved two Southern Front Contra groups--UDN-FARN, a military group associated with Fernando "El Negro" Chamorro, and PCNE, a Contra political group in the South. Cabezas claimed that he helped move 25 to 30 kilos of cocaine from Costa Rica to San Francisco, generating $1.5 million. According to Cabezas, part of that money was given to Troilo and Fernando Sanchez to help Eden Pastora's and Fernando "El Negro" Chamorro's operations on the Southern Front in 1982 and l983.[122] After the trial, the U.S. government returned $36,020 seized as drug money to one of the defendants, Zavala, after he submitted letters from Contra leaders claiming the funds were really their property. The money that was returned had been seized by the FBI after being found in cash in a drawer at Zavala's home with drug transaction letters, an M-1 carbine, a grenade, and a quantity of Cocaine.[123] The Subcommittee found that the Frogman arrest involved cocaine from a Colombian source, Carvajal-Minota. In addition, Zavala and Cabezas had as a second source of supply, Nicaraguans living in Costa Rica associated with the Contras. FBI documents from the Frogman case identify the Nicaraguans as Horacio Pereira, Troilo Sanchez and Fernando Sanchez.[124]Pereira was convicted on cocaine charges in Costa Rica in 1985 and sentenced to 12 years in prison.[125] An important member of the Pereira organization was Sebastian "Huachan" Gonzalez, who also was associated with ARDE in Southern Front Contra operations. Robert Owen advised North in February 1985, that Gonzalez was trafficking in cocaine.[126] Jose Blandon testified that Eden Pastora knew that Gonzalez was involved in drug trafficking while he was working with ARDE. Gonzalez later left the Contra movement and fled from Costa Rica to Panama, where he went to work for General Noriega.[127] During the Pereira trial, evidence was also presented by the Costa Rica prosecutor showing that drug traffickers had asked leader Ermundo Chamorro the brother of UDN-FARN leader Fernando "El Negro" Chamorro, for assistance with vehicles to transport cocaine and for help with a Costa Rica police official.[128] Troilo and Fernando Sanchez were marginal participants in the Contra movement and relatives of a member of the FDN Directorate.[129] X. THE CUBAN-AMERICAN CONNECTION Several groups of Miami-based Cuba Americans provided direct and indirect support for the Southern Front during the period that the Boland Amendment prohibited official U.S. government assistance. Their help, which included supplies and training, was funded in part with drug money.[130] The State Department described the allegations in its July 1986 report to Congress as follows: There have been allegations that Rene Corbo and other Cuban Americans involved in anti-Sandinista activities in Costa Rica were connected with Miami-based drug traffickers. Corbo reportedly recruited a group of Cuban American and Cuban exile combatants and military trainers in the Miami area who operated inside Nicaragua and in the northern part of Costa Rica. Two Cuban exiles in this group, Mario Rejas Lavas and Ubaldo Hernandez Perez, were captured by the Sandinistas in June 1986. They were reportedly members of the UNO/FARN group headed by Fernando "El Negro" Chamorro. There is no information to substantiate allegations that this group from Miami has been a source of drug money for the UNO/FARN or any other resistance organization.[131]On May 6, 1986, Committee staff met with representatives of the Justice Department, FBI, DEA, CIA and State Department, to advise them of allegations of gun running and drug trafficking in connection with this group. In August 1986, the Committee requested information from the Justice Department regarding the allegations concerning Corbo and fellow Cuban Americans Felipe Vidal, Frank Castro, and Luis Rodriguez and Frank Chanes (two of the principals in Frigorificos de Puntarenas and Ocean Hunter), concerning their involvement in narcotics trafficking. The Justice Department refused to provide any information in response to this request, on the grounds that the information requested remained under active investigation, and that the Committee's "rambling through open investigations gravely risks compromising those efforts."[132] Less than three months earlier, the Justice Department had advised both the press and the Committee that the allegations had been thoroughly investigated and were without foundation. [133] At no time did the Justice Department disclose to the Committee in response to its inquiry that extensive information had in fact been developed by the FBI from 1983 through 1986 suggesting that many of the allegations the Committee was investigating were true. At the May 6, 1986 meeting with Committee staff, the CIA categorically denied that weapons had been shipped to the Contras from the United States on the flights involving Rene Corbo, noting that the material on which they were basing these assertions was classified, and suggested that the allegations that had been made to the contrary were the result of disinformation.[134] In fact, as the FBI had previously learned from informants, Cuban American supporters of the Contras had shipped weapons from south Florida to Ilopango, and from there to John Hull's airstrips in Costa Rica.[135] The persons involved admitted to the FBI that they had participated in such shipments, making general statements about them beginning in 1985. On June 4, 1986 and June 16, 1986, Rene Corbo, one of the principals in the shipments, explicitly told the FBI that he had participated in shipping weapons to the Contras in violation of U.S. Neutrality laws.[136] The Cuban-American contingent supporting the Contra effort on the Southern Front work with Pastora until May 30,1984 bombing at La Penca. After the assassination attempt on Pastora they shifted their allegiance to Fernando "El Negro" Chamorro of UDN-FARN. By mid-June 1984, the drug smuggling through the Southern Front zones controlled by the Contras had grown sufficientlyobvious that Robert Owen warned Lt. Col. Oliver North at the NSC that the "Cubans (are) involved in drugs."[137] Notes taken by Colonel Robert L. Earl during his tenure at the NSC described how in August 1986, the CIA was worried about ... disreputable characters in the Cuban-American community that are sympathetic to the Contra cause but causing more problems than help and that one had to be careful in how one dealt with the Cuban-American community and its relation to this, that although their motives were in the right place there was a lot of corruption and greed and drugs and it was a real mess.[138] In August 1988, Corbo and Castro were indicted in a Neutrality Act case involving the Contras brought by the U.S. Attorney for Miami and prosecuted by Assistant U.S. Attorney Jeffrey Feldman. No narcotics-related allegations were included in the August 1988 indictment.[139] One of the three principals in Frigorificos de Puntarenas and Ocean Hunter, Luis Rodriguez, was indicted on drug charges in April 1988. The others, Frank Chanes and Moises Nunez, participated in Contra military assistance operations in 1984 and 1985.[140] Nunez was employed by both the drug money laundering front, Frigorificos de Puntarenas, and by Glenn Robinette on behalf of the Second-North Enterprise. Former CIA Costa Rica Chief of Station Thomas Castillo told the Iran-Contra committees that Nunez "was involved in a very sensitive operation" for the Enterprise.[141] XI. RAMON MILIAN RODRIGUEZ AND FELIX RODRIGUEZ A particularly controversial allegation arose during the course of the Subcommittee's investigation. This involved Ramon Milian Rodriguez's offer to assist the Contras, following his arrest for money laundering. In a June 26, 1987 closed session of the Subcommittee, Milian Rodriguez testified that in a meeting arranged by Miami private detective Raoul Diaz with Felix Rodriguez, he (Milian) offered to provide drug money to the Contras. Milian Rodriguez stated that Felix accepted the offer and $10 million in such assistance was subsequently provided the Contras through a system of secret couriers. Milian Rodriguez testified that he also offered to assist in entrapping the Sandinistas in a drug sting--all in return for dropping the charges then pending against him. Felix Rodriguez strenuously denied Milian Rodriguez's version of the meeting, stating that he reported Milian's offer to a number of U.S. government agencies, including the FBI and CIA. No action was taken by those agencies, and Milian Rodriguez's case went to trial. Raoul Diaz refused to respond to a Committee subpoena to discuss his recollection of the meeting. Therefore, because of the diffi-culty the Subcommittee faced in ascertaining who was telling the truth--Ramon Milian Rodriguez or Felix Rodriguez--Milian was asked whether he would be willing to take a polygraph examination. He agreed to submit to an examination on the question of providing drug money to the Contras through Felix Rodriguez. Senator Kerry, the Subcommittee Chairman, arranged for one of the country's leading polygraph experts, Dr. Donald Raskin of the University of Utah, to travel to Washington, D.C. to administer the test. Dr. Raskin administered a partial examination of Milian Rodriguez on June 3-4, 1988. On two critical questions, Ramon Milian Rodriguez's answers were determined to be deceptive by Dr. Raskin. The questions were as follows: 1. Did Felix Rodriguez ask you to arrange deliveries of money for the Contras during the meeting at Raoul's office? Answer, yes. 2. Did you arrange approximately five deliveries of money for the Contras on the basis of phone calls you personally received from Felix Rodriguez? Answer, yes. On the third question, Dr. Raskin could not determine whether or not Ramon Milian Rodriguez was being truthful in his response. The question was as follows: 3. Did you arrange the deliveries of at least $5 million for the Contras using the procedures that you and Felix worked out? Answer, yes. At that point, Milian Rodriguez stated that he did not want to continue the examination. Based upon Dr. Raskin's oral evaluation of Ramon Milian Rodriguez, the Chairman concluded that his version of the meeting with Felix Rodriguez and his subsequent relationship with Felix in providing drug money for the Contras was not truthful. The Chairman reached no conclusion regarding the issue of whether Ramon Milian arranged for the deliveries of at least $5 million for the Contras. During Felix Rodriguez' public testimony before the Subcommittee on July 14, 1988, Senator Kerry stated that he did not believe Ramon Milian Rodriguez' version of the meeting was truthful. However, Milian Rodriguez' testimony regarding the Cartels, General Noriega's role in narco-trafficking, and his involvement in setting up companies which were later used to support the Contras, was corroborated by a number of witnesses, including Jose Blandon, Floyd Carlton, Gerald Loeb, and a Miami attorney who had supplied information on the Cartels in a closed session deposition. In addition, Milian Rodriguez' testimony on many of these points was corroborated by extensive documentary evidence and by grand jury statements by his partners in federal criminal proceedings. ------------------------------------------------------------------------ FOOTNOTES [1 ]Subcommittee deposition of Marcos Aguado, Part 3, p. 285. [2] "Allegations of Misconduct by the Nicaraguan Democratic Resistance," State Department document #3079c, April 16, 1986. [3] State Department document 3079c [4] Allegations of Drug trafficking and the Nicaraguan Democratic Resistance, State Department document #5136c, July 26,1986." [5] Iran-Contra testimony of Central American Task Force Chief, August 5, 1987, 100-11, pp. 182-183. [6] Iran-Contra deposition of Central American Task Force Chief, Appendix B, Vol. 3 pp. 1121 - 1230. Also North Diary page Q1704, March 26,1984, "Pastora revealed as drug dealer." [7] See extensive FBI investigative materials released in discovery in U.S. v. Corbo and U.S. v. Calero, SD Florida, 1988, documenting information the FBI had collected regarding these matters from 1984-1986. [8] National Public Radio, All Things Considered, May 5, 1986, Bill Buzenberg; New York Times, May 6, 1986, p. A-6. [9] Memcoms of May 6,1986 meeting, Subcommittee files. [10] Winer MemCom, 5/6/86, Messick MemCom, 5/6/86; Marum Memcom; 5/6/86, Committee Files; see Iran/Contra Deposition of FBI Agent Kevin Currier, Appendix B, Vol. 8 pp. 205-206. [11] Foreign Relations Committee-Justice Department correspondence, August 10,1985. [12] Subcommittee testimony of Jeffrey B. Feldman, October 5, 1988, p. 24; Feldman MemCom, November 17, 1987. [13] Subcommittee testimony of General Paul Gorman, Part 2, February 8, 1988 p. 44. [14] Subcommittee testimony of David Westrate, Part 4, July 12, 1988, p. 144. [15] Interviews conducted by Senator John F. Kerry with current and former Costa Rican law enforcement officials, San Jose, Costa Rica, October 31,1987. [16] Subcommittee testimony of Jose Blandon, Part 2, February 9, 1988 pp. 138-139. [17] Kerry interviews in Costa Rica, op. cit. [18] Subcommittee closed session with Werner Lotz, Part 4, April 8, 1988, p. 673; Blandon testimony, Part 2, p. 86; see also Carlton, Part 2, p. 196. [19] Lotz testimony, Part 4, p. 674 and Subcommittee testimony of Frances J. McNeil, Part 3 April 4, 1988, p. 58. [20] Blandon testimony, Part 2, p. 86 and McNeil, Part 3, p. 55, and Subcommittee testimony of Floyd Carlton, Part 2, February 10, p. 196. [21] Kerry interviews in Costa Rica, ibid. [22] Lotz testimony, op. cit., p. 690. [23] Lotz, Part 4, p. 690. [24] Lotz, Part 4, p. 678. [25] DEA Testimony before House Subcommittee on Crime, July 28,1988. [26] Ibid, pp. 683-684. [27] Ibid, pp. 680, 682. [28] Kerry interviews in Costa Rica, ibid. [29] Castillo deposition, ibid., p. 483. [30] Lotz, Part 4, p. 681- Letter of Eden Pastora to David Sullivan and Assistant Secretary of State Elliot Abrams, April 10, 1986. [31] Subcommittee testimony of Gary Betzner, Part 3, April 7, 1988, pp. 262-265. [32] Robert W. Owen, Iran-Contra testimony, May 14, 1987, p. 7; see also memo from Owen to Oliver North, April 1, 1985, pp. 1, 3. [33] Subcommittee interviews with GAO analysts, September 28,1988. [34] Subcommittee interviews with GAO analysts, ibid.- interviews with Ambassador Duemling, April 6, 1988. [35] Source for Payments to Suppliers: GAO Analysis of NHAO Accounts, final figures provided by Department of State to the Subcommittee on Narcotics, Terrorism and International Operations. January 4,1989. [36] Duemling statement to Senator Kerry, April 6, 1988. [37] Iran-Contra deposition of Robert Duemling, Appendix B, Volume 9, pp 47-78. [38] See Iran-Contra testimony of Adolfo Calero, Appendix B, Volume 3, p. 176. [39] U.S. Customs Service investigative report, "Guy Penilton Owen, et al., N90201," file NOGGBDO30036, New Orleans, May 18, 1983, pp. 6-8. [40] Subcommittee interview with Sheriff of Port Charlotte County, Florida, May 1987. [41] See Commerce Department Shipper's Export Declaration for R/M Equipment, Inc., file 0003688, Miami, Florida, February 28, 1985, re shipments for"Armed Forces of Honduras." [42] Commerce Department's Shipper's Export Declaration for R/M Equipment, Inc., file # 0003688, Miami, Florida, February 28,1985. [43] Customs report, NOGGGGGBDO300036, ibid., p. 13 [44] Address book seized by Customs, Port Charlotte, Florida, N2551, March 16,1987. [45] Subcommittee staff interview with Sheriffs investigators, Port Charlotte County, Florida, May, 1987. [46] Grand jury statements of Carlos Soto on file in U.S. v. Rodriguez, 99-0222, USDC, Northern District of Florida, September 29, 1987, and Subcommittee testimony of Ramon Milian-Rodriguez, Part 2, February 11, 1988, pp. 260-261; documents seized in U.S. v. Milian Rodriguez, SD Florida 1983. [47] Ibid. [48] U.S. v. Luis Rodriguez, 87-01044, US District Court for the Northern District of Florida; U.S. v. Luis Rodriguez, 88-0222 CR-King, U.S. District Court for the Southern District of Florida. [49] Banking records of Frigorificos de Puntarenas subpoenaed by House Foreign Affairs Subcommittee on the Western Hemisphere, May 1986; GAO Analysis NHAO Expenditures, May 1986. [50] Corporate Records, Florida Secretary of State, ocean Hunter, Inc. [51] Grand jury statements of Soto, ibid., Ramon Milian-Rodriguez, ibid. [52] Documents on file in U.S. v. Rodriguez, 99-0222, USDC, Northern District of Florida, 1988, from grand jury statements of Carlos Soto. [53] Documents on file in U.S. u. Luis Rodriguez, ibid., Northern District of Florida. [54] FBI 302, Continental Bank Bombing, FBI Agent George Kiszynski, MM174A-1298, released in U.S. v. Corbo, Southern District of Florida, 1988. [55] GAO Analysis of NHAO Payments, Western Hemisphere Subcommittee of House Foreign Affairs Committee, May 1986; banking records subpoenaed by Western Hemisphere Subcommittee. [56] U.S. V. Luis Rodriguez, ibid., Northern District of Florida; GAO analysis of NHAO payments. [57] Affidavit of Daniel E. Moritz, Special Agent for the DEA January 1985, U.S. v. Carleton et al., SD Florida, 85-70. [58] Ibid. [59] Moritz Affidavit, pp. 3-4, ibid. [60] Ibid. [61] See Iran-Contra testimony of Adolfo Calero, Appendix B Volume 3, p. 176 [62] U.S. v. Carlton, et al., U.S. District Court, Southern District of Florida, January 23, 1986. [63] GAO Analysis, NHAO Accounts, provided to Subcommittee September, 1988 [64] Motion For Permission to Travel, U.S. v. Caballero, SD Florida, 86-70-CR, July 16, 1986. [65] Court record, U.S. v. Carlton-Caceres, et al. SD Florida 86-070. [66] Indictment, U.S. v. Palmer, Detroit U.S. Attorney's Office, 1986; Subcommittee testimony of Michael B. Palmer, Part 3, April 6,1988, pp. 208-213. [67] Palmer, Part 2, p. 205 and Palmer Subcommittee Deposition, April 5, 1988, pp. 75-79, see generally Palmer indictment by Detroit U.S. Attorney in June 1986, and documents released as discovery in U.S. v. Vogel et al. [68] Palmer testimony, House Judiciary Subcommittee on Crime, September 23,1988. [69] Subcommittee deposition of Karol Prado, Part 3, p. 278, see also Iran/Contra Testimony of CIA Central American Task Force Chief, August 5, 1987,100-11, pp. 192-183. [70] Castillo executive session, Iran/Contra Committees, ibid., pp. 9-10. [71] Subcommittee deposition of Octaviano Cesar, San Jose, Costa Rica, October 31, 1987, Part 3, pp.278-281. [72] State Department document #5136c, p. 5. [73] Ibid. [74] Subcommittee testimony of Marco Aguado and Karol Prado, Part 3, p. 285. [75] Iran-Contra testimony of Robert Owen, Appendix B, Volume 20, pp. 849-850. [76] Deposition of Karol Prado, ibid., p. 285. [77] Subcommittee testimony of George Morales, Part 3, April 7, 1988, p. 297. [78] Ibid., p. 300. [79] Closed session testimony of Adolfo "Popo" Chamorro, April 6, 1988, p. 13. [80] Ibid., p. 15. [81] Testimony of Karol Prado, Part 3, p. 278. [82] Ibid., pp. 278-279 [83] Chamorro, ibid., pp. 11-12. [84] Depositions of Aguado, Prado and Cesar, Part 3, pp. 277-286 and Chamorro, ibid., pp. 16, 20. [85] Aguado, Part 3, p. 285 [86] Cesar, Part 3, p. 286. [87] Ibid., p. 282. [88] See e.g. Letter from Eden Pastora to David Sullivan and Elliott Abrams, Ibid. [89] Subcommittee testimony of Karol Prado, Part 3, p. 385. See North Diary p. Q0450, July 24, 1984. The entry reads: "get Alfredo Cesar on Drugs," see also Iran-Contra declassified executive session testimony of Thomas Castillo, May 29, 1987, pp. 83-85 and Iran-Contra deposition of Thomas Castillo, Appendix B Volume E, pp. 250-252. [90] Iran-Contra declassified executive session of Thomas Castillo, p. 84. [91] Subcommittee testimony of George Morales, Part 1, July 16, 1987, p. 98. [92] David Keany and Andy Semmel of the Senate Foreign Relations Committee staff and Dick McCall of Senator Kerry's staff, attended the meeting. [93] See correspondence from DEA Administrator to John C. Lawn to Senator John F. Kerry, January 13, 1989. [94] North notebook pages Q 0344, 0414, 0415, 0426, 0431, 0543, 0550, 0932, 0955, 0977, 1156 1159; Iran-Contra Deposition of Robert W. Owen, May 4, 1987, pp. 6-15 and October 1, 1987, pp. 3-34; RWO Exhibit 12, 2/27/86; Iran-Contra testimony, May 14,1987, p. 818. [95] Castillo executive session, ibid., p. 59. [96] Iran-Contra deposition of Robert W. Owen, Appendix B, Vol. 20, pp. 650, 802 [97] Testimony of Louell Hood and Douglas Siple, Subcommittee on International Economic Policy, Trade, Oceans and Environment and Subcommittee on Terrorism, Narcotics and International Operations, October 30, 1987, pp. 160-161. [98] "The CIA Blows an Asset," Newsweek, September 3, 1984, pp. 48-49. [99] Subcommittee testimony of Jose Blandon, Part 2, p. 129. [100] Subcommittee deposition of Werner Lotz, Part 4, April 8, 1988, pp. 681-682, 691-696. [101] Subcommittee testimony of Floyd Carlton, Part 2, pp. 205-507; Subcommittee testimony of Jose Blandon, Part 2, pp. 115-116. [102] Betzner, Part 3, pp. 253-254, 256. [103] Ibid., pp. 257-258 [104] Ibid., pp. 262-267; see also Morales testimony, Part 3, pp. 301-304 and DEA polygraph of Morales. [105] Ibid., pp. 262-267. [106] Iran-Contra deposition of Jeffrey Feldman, Appendix B, Volume 10, April 30, 1987, pp. 77-78; Statements of Steven Carr and Peter Glibbery to Senate staff, March 8,1986. [107] Feldman, ibid., pp. [108] Ibid. p. 86. [109] Ibid. pp. 86-88. [110] Ibid., p. 84. [111] Ibid., pp. 86-88. [112] Iran-Contra testimony of Leon Kellner, Appendix B, Vol. 10, April 30, 1987, pp. 1094-1095. [113] Testimony of Eric Garfinkel, Vice President and General Counsel, Overseas Private Investment Corporation, Subcommittee on International Economic Policy Trade, Oceans and Environment and Subcommittee on Terrorism, Narcotics and International Operations, Part 1, October 30, 1987 pp. 106-107. [114] Ibid., p. 107. [115] Ibid., p. 127. [116] Subcommittee interviews with prospective purchasers. [117] OPIC testimony, ibid., p. 107. [118] Subcommittee interviews with OPIC and Justice staff, January 1989. [119] OPIC documents provided the Subcommittee. [120] Subcommittee testimony of Crone, Sipple and Hood, ibid., pp. 147-167. [121] State Department Document #5136c, July 26, 1986 [122] San Francisco Examiner, March 16, 1986. [123] Ibid. [124] November 8, 1982, FBI teletype from San Francisco to Director, U.S. v. Zavala, et al. [125] CBS Evening News, June 2, 1986. [126] Iran/Contra Testimony of Robert Owen, May 14, 1987, Exhibit RWO 7, p. 801. [127] Blandon, Part 2, pp. 132-133. [128] CBS Evening News, June 12, 1986. [129] Staff interview with Carlos Cabezas, March, 1988, and with former Contras in San Francisco and Miami. [130] FBI 302's of Special Agent George Kiszynski, released in U.S. v. Calero and U.S. v. Corbo , both Southern District of Florida, including 3/8/85 interview of Frank Castro, 12/17/84 interview of Raphael Torres Jimenez, 3/1/85 interview of Rene Corbo; 9/6/84 interview of Jose Coutin; see also grand jury testimony of Carlos Soto in U.S. v. Luis Rodriquez, Northern District of Florida. [131] State Department Document #5136c, July 26, 1986. [132] Letter of John Bolton to Senator Richard G. Lugar and Senator Claiborne Pell, August 11, 1986. [133] Statements of DOJ spokesman Pat Korten to National Public Radio, May 5, 1986; New York Times, May 6, 1986; statements of Korten, Kenneth Vergquist, and other Justice Department officials to Committee staff prior to June 26, 1986 Executive Session; see generally Kellner Deposition to Subcommittee, November 8, 1988, noting his objections to statements by Justice regarding the case. [134] Winer Memcom, May 6, 1986 meeting, Subcommittee files. [135] See generally the investigative files of Special Agent Kisyznski released in U.S. v. Corbo and U.S. v. Calero; SD Florida 1988; admissions of Ramon Milian Rodriguez to Customs in May 1983, U.S. v. Milian Rodriguez, SD Florida, documents released in connection with U.S. v. Luis Rodriguez, ibid. [136] FBI 302's of SA Kisyznski, released in U.S. v. Corbo, SD Florida, 1988. [137] North Notebook Entry Q-0344. [138] Iran/Contra Deposition of Robert L. Earl. Appendix B, Vol. 9, p. 1109. [139] U.S. v. Calero et al. and U.S. v. Corbo et al., ibid. [140] U.S. v. Luis Rodriguez, Northern District of Florida; FBI 302's of SA Kiszynski, ibid. [141] Iran-Contra Testimony of Owen, Appendix B, Vol. 20, pp. 733-735; deposition of Thomas Castillo, Appendix B, vol 3, p. 180. ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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