C.I.A. did not target black community Crack and the contras; Three views on the controversy over the C.I.A., its allies and drug dealing

Jack Blum was special counsel to a Senate subcommittee that investigated contra drug operations in 1987-88. On Oct. 23, he testified before the Senate Select Committee on Intelligence, chaired by Sen. Arlen Specter. The hearings were sparked by the San Jose Mercury News' series "Dark Alliance." Here are excerpts from Blum's testimony:

Blum: If you ask the question, did the CIA sell drugs in the black neighborhoods of Los Angeles, to finance the contra war, the answer will be a categorical no.


The fact of the matter is, we found no evidence whatsoever to suggest that there was a targeting of the African-American community.

Cocaine in the mid-'80s and into the early '90s was a perfect equal opportunity destroyer. We had addiction and problems in school yards across America. It didn't matter what color you were, where you were from, what your national origin was.


The problem became more acute in the African-American community because the definition of a problem addict in America is an addict who runs out of money. And if you run out of money quickly, you become involved in the drug trade, you become a visible social problem, and you get on the screen.

The second issue is, did the CIA do the selling of the cocaine and did the contras profit?

And, as far as we were able to determine, no member of the staff of the CIA, that is someone on the payroll as opposed to the people they work with, was in the cocaine business. And certainly, no one on the staff of the CIA, as far as we could determine, was actively selling the drug.

And then finally the question of was it used to support the contras?

I will tell you of two meetings that I had with contra veterans, one in 1986 and one in 1989, at the beginning and the end of my investigation. And they said, our problem was, we never had any money. Our leadership stole most of it. So, I submit, what went on led to the profit of people in the contra movement, not to supporting a war that we were trying to advance. [See Blum, 8f]

Now having said that, we have to go back to what is true.

And what is true is, the policy-makers absolutely closed their eyes to the criminal behavior of our allies and supporters in that war. The policy-makers ignored their drug dealing, their stealing, and their human rights violations. The policy-makers allowed them to compensate themselves for helping us in that war by remaining silent in the face of their impropriety and by quietly undercutting law enforcement and human rights agencies that might have caused them difficulty.

We knew about the connection between the West Coast cocaine trade and the contras. There was an astonishing case called the Frogman Case. In that case the United States attorney for San Francisco returned $35,000 of cocaine proceeds, voluntarily to the contras, when it had been seized as the proceeds of drug trafficking. We found that absolutely astonishing.


I know of no other situation where the Justice Department was so forthcoming in returning seized property.

Specter: Was that the Justice Department or the district attorney of San Francisco?

Blum: This was the Justice Department, the United States attorney.

Specter: United States attorney?

Blum: That's correct. It should be stressed that the Blandon-Meneses ring was part of a very much larger picture. And to give you an idea of how large that picture was, there was a point where the wholesale price of cocaine on the street in Los Angeles, reached $2,500 a kilo. Twenty-five hundred dollars a kilo, according to all the experts, is below cost. And that is a flood of cocaine. And our friend "Freeway Ricky" was touching only a tiny fraction of what was coming in. We had a definite cocaine epidemic.

Now, you might ask, why did the hearing we ran [in the late 1980s], not get more attention.


And the answer is, we were subject to a systematic campaign to discredit everything we did.

Every night after there was a public hearing, Justice Department people, administration people, would get on the phone and call the press, and say the witnesses were all liars, they were talking to us to get a better deal, that we were on a political vendetta, that none of it was to be believed, and please don't cover it.

The consequence of that was, the hearing and the report were given very modest play in the press.

It was a systematic effort to discredit us that prevented the conclusions from receiving the attention I believe they warranted.

Now, the connection with the drug trade goes way back.

We were involved in assisting the Kuomintang armies against Mao Tse-tung in the 1950s. During that period, we supported people who were in the heroin trade in the mountains of Burma. And those Kuomintang armies helped themselves and financed themselves out of the heroin business.


It turned up again during the Vietnam War, where allies, the Nung tribesmen, were in the heroin business.

There were many accusations and all kinds of stories about was the CIA dealing heroin. And the answer was, "We're not doing it." Probably true. "It was our allies and we have to work with whoever we have to work with."

In Afghanistan recently, we've had allies who went into the heroin business, big time. It's the largest cash crop in Afghanistan. It's the most important export from the region.

Now, to turn specifically to the Latin American story, and where our investigation picks up on the drug trail. We had testimony from a man who was a civilian employee of Argentine military intelligence. He told us that the United States had encouraged the Argentine military to act as proxy for the United States during the Carter administration, because we had a public policy of supporting human rights, and another policy of really trying to sustain our anti-communist efforts.

The Argentines, he said, sponsored the cocaine coup in Bolivia, and then set up a money laundering operation in Fort Lauderdale, and we later checked and indeed he had set up that operation. And he used the money laundering operation in Fort Lauderdale to provide funds to the Argentines all over Latin America, who were in the business of 'fighting communism.'

We should remember that it was the Argentines who were the original trainers of the contras. They were the ones who brought the original contras to Honduras, Guatemala, and began to teach them how to do what they had to do against the Sandinista government.


The second man who turned up on our screen, very big time, was General Noriega.

And, as you will recall, press accounts of the Senate, the government has made this public so I am not saying anything that is classified - Noriega was on our payroll. The accounts we heard were that he was getting paid some $200,000 a year by the United States government. At that time that was going on, virtually everybody who dealt with him knew he was in the drug business. It was an open secret. In fact, it was so open it appeared on the front page of the New York Times in June of 1986. I testified about it in a closed session of the Foreign Relations Committee in 1986.

We have as the absolute low point of the contra war, Ollie North having a meeting with General Noriega, and he recorded that meeting in great detail in his notebooks, in which he is bargaining with Noriega.

Noriega says to him, "I've got this terrible public relations problem over drugs, what can you do to help me?"

"Here's what I'll do to help you. I'll assassinate the entire Sandinista leadership. I'll blow up buildings in Managua." Ollie doesn't call the cops. What Ollie does is, he goes back to Poindexter, and Poindexter says, gee, that's a little bit extreme, can't you get him to tone it down? Go back and meet with him again, which Ollie does.

When our committee asked the General Accounting Office to do a step-by-step analysis of just who in our government knew that General Noriega was dealing drugs, and when they knew it, and what they did to act on that knowledge, the administration told every agency of the government not to cooperate with GAO, labeled it a national security matter, and swept it into the White House and cloaked it in executive privilege.


That investigation never went forward, should have gone forward, I was very much dismayed. Our committee subpoenaed Ollie North's notebooks. And the history of those notebooks is quite astonishing. Not many people realize this, but the Senate never got a clean copy of those notebooks. North's lawyers were permitted to expurgate sections of the notebooks, based on "relevance." Our committee subpoenaed those notebooks, and we engaged in a 10-month battle to get them. And ultimately, the investigation ended, the subcommittee's mandate ended, we never got them.

Now, the problem of General Noriega and Ollie North's notebooks and what was in them, is only one of a number of problems related to this war and related to drug trafficking that we stumbled into.

We had problems in Haiti, where friends of ours, that is, intelligence sources in the Haitian military, had turned their facilities, their ranches and their farms over to drug traffickers. Instead of putting pressure on that rotten leadership of the Haitian military, we defended them. We held our noses, we looked the other way, and they and their criminal friends distributed through a variety of networks, cocaine in the United States and Miami, and Philadelphia, New York and parts of Pennsylvania.

We also became aware of deep connections between the law enforcement community and the intelligence community.

I personally repeatedly heard from prosecutors and people in the law enforcement world, that CIA agents were required to sit in on the debriefing of various people who were being questioned about the drug trade. They were required to be present when witnesses were being prepped for certain drug trials. At various times, the intelligence community inserted itself in that legal process.

I believe that that was an impropriety, that that should not have occurred.


Specter: When you say inserted itself into that process, are you suggesting that the intelligence community thwarted or stopped prosecutions from going forward?

Blum: That too, that too. Let me explain. There were first participations in the investigative process, a process and procedure for clearing informants that were put on by DEA. A process of being there for debriefings of important witnesses. But then, when there were criminal cases that threatened to expose various covert operations in the region, those criminal cases would be then put aside, for one reason or another. And, there was a procedure for doing that within the Department of Justice. We attempted to probe that procedure, the Department of Justice rebuffed us rather systematically. We had some conversations with one of the Justice Department officials involved and took his deposition, but we were never able to get really satisfactory responses to the questions we asked.

We do know that Ollie North directly intervened in a number of cases to help people who had helped the covert war.

Specter: Now Mr. Blum, when you come to that subject, during my earlier tenure on this committee, I saw that much to my dissatisfaction. There is a statute which sets forth proceedings where the Department of Justice is authorized to drop prosecutions where they cannot make disclosures of confidential informants. And I have personally questioned the wisdom of that kind a procedure, but it is authorized by U.S. law. And this committee was frequently rebuffed by claims of that sort. Let me ask you a question relevant here, did you ever see any of that interference by U.S. intelligence, CIA or otherwise, of any prosecutions against cocaine in Los Angeles?

Blum: We did not focus on Los Angeles and Los Angeles prosecutions. I can tell you there were cases in Miami and there were other cases in other parts of the country. If you dig into the materials, I can't remember them off the top of my head.

Specter: You say there were not cases in Los Angeles but were there?


Blum: We didn't find them, that doesn't mean there weren't any.

Specter: Well, I understand that. But I'm asking whether you found them. But you say you did find such cases in Miami.

Blum: Right.

Specter: Now, did those cases permit cocaine dealers to continue to operate?

Blum: One had the sense they did, but we could not get - when we got into this area we confronted an absolute stone wall. There were stalls, there were refusals to talk to us, refusals to turn over data. An assistant U.S. attorney who gave us information was reprimanded and disciplined, even though it had nothing to do with the case in a confidential way.

Specter: And who was he?


Blum: I don't recall his name, but it's in our hearing materials and we can furnish that for the record. We had a series of situations where Justice Department people were told that if they told us anything about what was going on, they would be subject to very severe discipline. And I got a lot of back door information, and then I was told I could never use it because the careers of the people involved would be seriously compromised. Now we had another problem.

Specter: Wait a minute. Now, when you were told that, did you make any efforts to use that information?

Blum: Yes. We went back to the Justice Department. We talked to them. We said we really want to talk to these people. They simply stone-walled us.

Specter: Now you're saying that you received information on a voluntary basis?

Blum: Uh huh.

Specter: But under an agreement not to use it because it would effect the careers of those individuals?


Blum: Right.

Specter: And you honored those conditions?

Blum: We honored the confidentiality, it's the only way, and I'm sure you understand that, that you can ever get anyone to talk to you. But then we went back and tried to get the information on the cases. And, as soon as we did, the answer was sorry, we can't do that. There were a thousand of excuses.

We ran into another procedure which was extremely troubling. There was a system for stopping Customs inspections of inbound and outbound aircraft, from Miami and from other airports in Florida.

People would call the customs office and say stand down, flights are going out, flights are coming in. We tried to find out more about that, and were privately told, again by Customs people who said 'please don't say anything,' but the whole thing was terribly informal, and there was no real way of determining the legitimacy of the request to stand down, or the legitimacy of what was on the plane in going out to people in the field. That I found to be terribly troubling, and it's a matter that you all should be looking at very carefully.

The problem, as I see it is, if you go to bed with dogs, you get up with fleas. If you empower criminals, because empowering them happens to be helpful at the time, the criminals are sure to turn on you next. And the people who plan covert operations should know that and should be held accountable for not telling their bosses, if in fact they are dealing with this kind of guy, and they do come back and bite them.


The most important loss that we had as a result of the covert war in Central America was the loss of public trust in the honesty and integrity of the people who run America's clandestine operations. The measure of that is how ready everyone is to believe a "Freeway Ricky" and his fable about being the arm of the CIA in selling crack in Los Angeles. Ricky deserves life in prison for what he did to his people in his community. The CIA didn't make him do it, and the profits from his deals certainly didn't go to help the contras. But that does not mean that there is not a need for a very powerfully done investigation and a backward look at the entire 40-year history of this problem. Thank you Mr. Chairman.

The Sun thanks WPFW in Washington and Pacifica Radio for providing a tape of Blum's testimony.