PILOTS, COMPANIES, AND OTHER INDIVIDUALS WORKING FOR COMPANIES USED TO SUPPORT THE CONTRA PROGRAM
What drug trafficking allegations was CIA aware of, and when,
involving pilots and companies supporting the Contra program? How did CIA
respond to this information, and how was this information shared with other U.S.
Allegations Involving Companies Supporting the Nicaraguan Humanitarian
- Background. In early 1986, Senator John Kerry began an investigation
of allegations that elements of the supply network supporting the Contras
were linked to drug traffickers. In April 1986, Senator Kerry took the information
he had developed to the Chairman of the Senate Foreign Relations Committee
(SFRC), Richard Lugar, who agreed to conduct a staff inquiry into these allegations.
In February 1987, the SFRC expanded the focus of the inquiry to include the
impact of drug trafficking from the Caribbean and Central and South America
on U.S. foreign policy interests. In April, the responsibility for this broader
investigation was given to the Subcommittee on Terrorism, Narcotics and International
Operations, chaired by Senator Kerry.
- The Subcommittee's report, "Drugs, Law Enforcement and Foreign Policy"
("the Kerry Report"), was published in December 1988 and identified
six companies that had been owned and operated by convicted or suspected drug
traffickers and were linked to the Contras. The companies were:
- Frigorificos De Puntarenas
- Ocean Hunter
- Hondu Carib
In August 1985, Congress had appropriated $27 million for humanitarian
support to the Contras and designated the DoS as the executive agent for the
purchase and distribution of all aid. As a result, the Nicaraguan Humanitarian
Assistance Office (NHAO) was created in DoS under the direction of Ambassador
Robert Duemling. The program reached its peak in March 1986 when it delivered
over 500,000 pounds of material to Aguacate, Honduras, on 11 chartered flights
from the United States. The last NHAO flights were in June 1986 and the program
officially ended in October 1986. All of the companies, except for Ocean Hunter,
that had been identified by the Kerry Report as being owned and operated by
known or suspected drug traffickers were included among the organizations
selected by DoS to supply humanitarian aid to the Contras through NHAO.
CIA Vetting of Companies for NHAO. In July 1987, the Central Intelligence
Agency's Office of Inspector General (CIA/OIG) published a Report of Inspection
that noted that the NHAO--not the Agency--was responsible for administering
the humanitarian aid program. The only Agency roles recognized in the "legislative
history" of the statutorily-established program were to provide advice
on the delivery of the aid and to monitor and verify its receipt by the Contras
According to the 1987 CIA/OIG Report of Inspection, "Agency support
was always at the behest of NHAO and appears to have been both legal and proper."
Among the types of assistance the Agency provided the NHAO, according to the
Report, was advice on contractors. Alan Fiers was interviewed by the CIA/OIG
inspection team on April 27, 1987. The CIA interview report stated that Fiers
said he and Ambassador Duemling "had frequent meetings regarding possible
contract cargo carriers." Fiers also reportedly said he had "checked
out" some of these carriers for Duemling.
Fiers' written response to OIG questions during this current investigation
stated that he "specifically recalls discussions with Ambassador Duemling"
on the subject of vetting air carriers for the NHAO. "More specifically,"
I personally steered them [NHAO] away from the Private Benefactors,
I believe we guided them toward carriers they ultimately used, although
I cannot recall the details exactly [sic] how the names of the carriers
were initially brought to my attention.
With the possible exception of Vortex, no information has been found to
indicate that this CIA vetting assistance for the NHAO included information
regarding the six companies identified in the Kerry Report as having ties
to drug trafficking.
Background. Frigorificos De Puntarenas ("Frigorificos")
was a Costa Rican seafood company that was created as a cover for laundering
drug money, according to grand jury testimony by one of its owners that is
cited in the Kerry Report and testimony by Ramon Milian Rodriguez, the convicted
money launderer who established the company. Frigorificos was owned and operated
by Luis Rodriguez of Miami, Carlos Soto and Ubaldo Fernandez. Milian Rodriguez
told Federal authorities about Luis Rodriguez' drug trafficking prior to Milian's
arrest in May 1983. Moises Nunez was the General Manager of Frigorificos.
Frigorificos De Puntarenas/Ocean Hunter
The December 1988 Kerry Report indicated that the DoS used Frigorificos
to deliver more than $261,000 in humanitarian assistance funds to the Contras
in 1986. These funds were controlled by Rodriguez, who signed most of the
orders to transfer the funds to the Contras.
The Kerry Report further indicated that Luis Rodriguez owned another company--Ocean
Hunter--that was linked to drug trafficking and money laundering. Ocean Hunter
was a Miami-based seafood company that Milian Rodriguez had also established
to enable Luis Rodriguez to launder drug money. Ocean Hunter imported seafood
from Frigorificos and, according to testimony by Soto and Milian Rodriguez,
intra-fund transfers were used to launder drug profits. Luis Rodriguez was
indicted on drug trafficking charges by the U.S. Government in September 1987
and on tax evasion charges in April 1988 in connection with money laundering
through Ocean Hunter.
Allegations of Drug Trafficking. According to the December 1988
Kerry Report, Senator Kerry informed the Department of Justice, DEA, CIA,
and NHAO in May 1986 of allegations he had received involving Luis Rodriguez
and his companies--Frigorificos and Ocean Hunter--in drug trafficking and
money laundering. No information has been found to indicate that CIA ever
received this information from Senator Kerry.
On January 29, 1986, a cable reported to Headquarters that DEA had seized
over 400 pounds of cocaine concealed in a container of yucca on January 23.
The container was leased to David Mayorg--a close advisor to Eden Pastora.
In September, it was reported that the container in question had been destined
for Ocean Hunter.
Ramon Milian Rodriguez. According to an undated, unsigned Headquarters
memorandum, Milian was arrested by United States Customs in May 1983 as he
was preparing to leave the United States with $5.6 million aboard his Lear
Information Sharing with Other U.S. Government Entities. CIA records
indicate that the Agency provided some information to the SSCI between December
1986 and June 1988 regarding its contacts with Milian. A MFR dated December
10, 1986 to the SSCI stated that CIA had no relationship with Milian but had
received unsolicited information regarding Sandinista drug trafficking from
Milian in 1984. During a joint briefing of the SSCI and HPSCI staffs on July
31, 1987, Alan Fiers stated that the CIA had no relationship with Milian but
had received unsolicited information. An MFR dated June 23, 1988 from John
Buckman answered questions originating from Senator John Kerry about Agency
contacts with Milian. This MFR also stated that the Agency had no relationship
with Milian. CIA records do not indicate whether any of the information originating
from Milian was passed to law enforcement agencies.
CIA Vetting Role. No information has been found to indicate that
CIA played any role in NHAO's selection of Frigorificos as a conduit for the
delivery of humanitarian assistance to the Contras.(30)
No information has been found to indicate that CIA played any role in NHAO's
selection of Ocean Hunter as a conduit for the delivery of humanitarian assistance
to the Contras.
Background. A 1983 Customs Investigative Report stated that "SETCO
Aviation is a corporation formed by American businessmen who are dealing with
Juan Matta Ballesteros and are smuggling narcotics into the United States."
Beginning in 1984, SETCO was the principal company used by the Contras in
Honduras to transport supplies and personnel for the FDN.
SETCO was chosen by NHAO to transport goods on behalf of the Contras from
late 1985 through mid-1986. According to testimony by FDN leader Adolfo Calero
before the Iran-Contra committees, SETCO received funds for Contra supply
operations from the bank accounts that were established by Oliver North.
According to U.S. law enforcement records cited in the Kerry Report, SETCO
was established by Juan Matta Ballesteros, "a class I DEA violator."
The Kerry Report also states that those records indicate that Matta was a
major figure in the Colombian cartel and was involved in the murder of DEA
agent Enrique Camarena. Matta was extradited to the United States in 1988
and convicted on drug trafficking charges.
The FDN, and later ERN/North, also used SETCO for airdrops of military
supplies to Contra forces inside Nicaragua.
Allegations of Drug Trafficking. In a July 10, 1987 memorandum
to the LA Division Chief, Assistant Secretary of State for Inter-American
Affairs Elliott Abrams requested, among other things, that CIA share as part
of a U.S. Government effort to "bring Matta to the United States to face
charges" any information it had on Matta's activities in Honduras. Abrams
noted that Matta had reportedly been considering "a number of business
schemes for laundering his drug money." On July 24, 1987, CATF responded
to the request from Abrams by sending a cable asking for information regarding
Matta's activities in Honduras. An August 4 cable informed CATF that Matta
had purchased "a small air cargo service," but did not provide the
name of the company. No information has been found to indicate that Headquarters
provided this information to Abrams or requested any follow-up reporting regarding
Matta's purchase of the cargo service.
On April 28, 1989, the Department of Justice (DoJ) requested that the Agency
provide information regarding Matta and six codefendants for use in prosecution.
DoJ also requested information concerning SETCO, described as "a Honduran
corporation set up by Juan Matta Ballesteros." The May 2 CIA memorandum
to DoJ containing the results of Agency traces on Matta, his codefendants
and SETCO stated that following an "extensive search of the files and
indices of the Directorate of Operations. . . . There are no records of a
The CIA officer who was responsible for handling the 1989 DoJ request says
that she followed the usual procedures for tracing names. She says that the
fact that no record was found indicates that LA Division had not entered SETCO
into the name trace database. She also states that the officer who reviewed
the draft when her proposed response to DoJ was sent to the Honduran desk
in CATF for coordination should have informed her that the Agency did have
information concerning SETCO, and should have provided that information to
her. She notes, however, that most managers would not focus on a "no
The draft response to DoJ indicated that a CATF officer coordinated on
the draft. He says that he does not recall SETCO, never visited its facilities
and does not recall coordinating on the response to DoJ.
A former CATF Nicaraguan Operations Group Chief says that the officer who
coordinated on the cable should have known about SETCO because it was common
knowledge in CATF that the company was used to support the Contra program
and he had probably been at SETCO's facilities at one time or another. He
cautions, however, that there can be no certainty that the officer actually
coordinated on the response. Although his name was entered as the coordinating
officer, the former NOG Chief states that this does not necessarily indicate
that the officer saw it. Someone else could have coordinated for him if he
had not been available at the time. The former NOG Chief says that the only
way to ascertain that the officer reviewed the document is to examine the
routing slip with the actual signature. No routing slip has been found, however.
A June 15, 1989 cable reported to Headquarters that DEA had "uncovered
. . . information of possible drug trafficking" involving Manuel and
Jose Perez, owners of SETCO Aviation. A June 15, 1988 Headquarters memorandum
regarding a May 1988 DO trace request concerning Matta indicated that Matta
"normally put . . . businesses in the name of third persons" for
his holdings in Colombia.
Matta, who is incarcerated in the federal penitentiary in Florence, Colorado,
says that he did not own or have any financial interest in SETCO, and claims
he does not recognize the name.
No information has been found to indicate that CIA received allegations
that any SETCO aircraft were involved in drug trafficking during the Contra
era. In late 1992, however, a Defense Department counternarcotics cable indicated
that SETCO was being used in the Honduran Bay Islands by drug traffickers
who concealed narcotics under dried fish in transport through Honduras. The
cable did not indicate whether SETCO was aware of this transshipment operation.
Information Sharing with Other U.S. Government Entities. No records
have been found of information shared with law enforcement agencies.
CIA Vetting Role. No information has been found to indicate that
CIA played any role in NHAO's selection of SETCO as a conduit for the delivery
of humanitarian assistance to the Contras.
Background. According to the December 1988 Kerry Report, DIACSA
was an aircraft dealership and parts company whose president was Alfredo Caballero.
During 1984 and 1985, the FDN chose DIACSA for "intra-account" transfers
to conceal that some funds for the Contras were sent through deposits arranged
by Oliver North. A February 8, 1985 cable to Headquarters described DIACSA
as the "ARDE cover company" and indicated that DIACSA was used to
purchase aircraft for ARDE. According to the Kerry Report, on January 23,
1986, Caballero, Floyd Carlton--a cocaine trafficker associated with Manuel
Noriega--and five others were indicted and later convicted for bringing 900
pounds of cocaine into the United States and laundering $2.6 million. No information
has been found to indicate that the Agency had any relationship with DIACSA
Allegations of Drug Trafficking. A May 4, 1985 cable to Headquarters
provided a summary of reporting concerning FRS personnel who may have been
involved in drug trafficking. According to the cable, Caballero in February
1985 had offered to transport FRS supplies to Ilopango or Costa Rica in one
of his aircraft if he could make the landing arrangements. The cable also
reported that Caballero was the Miami representative of a company based in
San Jose that was owned by David Mayorga. The cable noted that there were
those who believed that Mayorga, Caballero and others were transporting drugs
from San Jose to Miami.
No other information has been found to indicate that Caballero or DIACSA
were connected with drug trafficking or traffickers.
Information Sharing with Other U.S. Government Entities. No information
has been found to indicate that the Agency provided any information concerning
alleged drug trafficking by Caballero or DIACSA to other U.S. Government intelligence
or law enforcement agencies or the Congress.
CIA Vetting Role. No information has been found to indicate that
CIA played any role in NHAO's selection of DIACSA as a conduit for the delivery
of humanitarian assistance to the Contras.
Background. According to the December 1988 Kerry Report, the NHAO
had a contract in 1985-1986 with Vortex, an air transport company based in
Miami, Florida, to move supplies for the Contras. Michael Palmer, the Company's
executive Vice President, signed the contract for Vortex in November 1985.
At the time the contract was signed, Palmer was under investigation by the
FBI for drug smuggling, and a federal grand jury was preparing to indict him
According to an April 6, 1988 memorandum to DCI Webster and DDCI Gates
from David Pearline in OCA, Palmer testified that day to the SFRC Subcommittee
on Terrorism, Narcotics and International Operations that he had gone to work
for Vortex in 1985 or early 1986. Vortex later changed its name to Universal
Air Leasing. Palmer also testified that Vortex/Universal entered into a contract
in late 1986 to service planes and deliver materiel to the Contras. Palmer
denied that he was ever an Agency asset or employee.
The April 6, 1988 memorandum also reported that Palmer had testified that
he smuggled 120,000 pounds of marijuana into the United States in 1977. Palmer
testified further that aircraft he used to smuggle drugs were later used to
supply humanitarian assistance to the Contras. He asserted, however, that
he was not involved in illegal drug smuggling while involved in supplying
the Contras for the NHAO.
Relationship with CIA. An October 3, 1986 MFR indicated that Fiers
chaired a "final meeting" on October 2, 1986 concerning preparations
to implement the $100 million support program that Congress was about to approve
for the Contras. According to that memorandum, Vortex/Universal would be used
under subcontract for logistical flights. An April 7, 1987 memorandum described
Palmer as the focal point for obtaining crews, mechanics and spare parts.
According to a March 25, 1988 memorandum to the Assistant General Counsel
from the SAS legal advisor, the subcontract with Vortex/Universal included
provisions for aircraft maintenance, as well as recruitment and training of
air crews. An attachment to SAS legal advisor's memorandum indicated that
Agency officers met with or spoke to Vortex/Universal personnel on several
occasions and visited Vortex/Universal sites once and possibly twice between
October 1986 and March 1987.
According to an April 7, 1987 Agency MFR, Palmer said that Al Herreros,
President of Vortex/Universal, was a law enforcement source of information.
Palmer also reportedly said that both he and Herreros were doing "sting/scam"
operations for DEA in April 1986. According to the March 25, 1988 SAS legal
advisor's memorandum to the Assistant General Counsel, the Agency's relationship
with Palmer and Vortex/Universal was terminated on April 16, 1987.
The former CATF contractor who oversaw support for the Contras at the time
does not recall asking for traces concerning Palmer or Vortex/Universal. No
information has been found to indicate that the Agency requested traces from
other agencies regarding Palmer or Vortex/Universal before or during the period
when Vortex was working for the NHAO.
Allegations of Drug Trafficking. According to an April 21, 1987
MFR by the LA Division Security Chief, a meeting was held on April 13, 1987
between CIA officers and DEA officials regarding Michael Palmer's relationship
with DEA. The MFR stated that then-Deputy CATF Chief had said that individuals
at Vortex/Universal Air, though probably "suspicious," were never
made witting that they were actually working for CIA through the Vortex/Universal
According to a March 26, 1987 memorandum to the Chief of the Policy and
Coordination Staff, one of the Nicaragua program's DC-6s was searched on March
21, 1987 by U.S. Customs agents after it landed at the Miami airport. Palmer
arrived to assist in obtaining clearance for the aircraft. A misunderstanding
developed between Palmer and Customs officials with the result that Customs
took the identification papers of Palmer and all the crew members. The March
26 memorandum indicated that the plane was given clearance by Customs only
after discussions in Washington between Agency and Customs officials. Subsequently,
according to an undated memorandum to DCI Webster from DDO Stolz, Customs
ran traces on Palmer and the plane's crew and discovered that Palmer had been
indicted in Detroit on drug trafficking charges. The March 26 memorandum also
stated that the difficulties with Customs arose because Customs did not receive
proper notification of the aircraft's arrival and the crew was not able to
answer questions about the aircraft's ownership because it had not been properly
briefed. Further, the plane was configured for airdrops and a weapon was found
According to an undated Stolz memorandum to DCI Webster, "a CIA officer
subsequently learned through a DEA official" that Palmer was a law enforcement
source of information and a meeting was arranged between DEA and CIA officers.
Although the memorandum indicates that a meeting between DEA and CIA officials
regarding Palmer took place on April 21, 1987, it cannot be entirely ruled
out that this was the same meeting as that which was described earlier in
LA Security Chief April 21, 1987 MFR that indicates that a meeting between
CIA and DEA officials took place on April 13, 1987.
In any event, the DEA officials reportedly told Agency officers in this
meeting that Palmer was an "operative in a sensitive drug investigation/sting
operation" and that his cooperation with DEA could be a determining factor
as to whether the indictment would be prosecuted.(31)
When told that the Agency was considering terminating its relationship with
Palmer, "DEA expressed concern regarding the possible impact that would
have on their own 'big operation.'" Nevertheless, the Agency "informed
DEA that we would direct the prime contractor to terminate all ties to Vortex/Universal
Air Leasing and the prime contractor did so promptly, at least with respect
to Agency operations."
According to Palmer's testimony to the Kerry committee and a March 31,
1988 memorandum from the SAS legal advisor to the OGC Assistant General Counsel,
Palmer contacted the Agency through the prime contractor's security officer
and secretary. However, the March 26, 1987 memorandum indicated that Palmer
contacted CIA officers as well as the prime contractor, in an effort to have
the DC-6 released by Customs.
The SAS Contracts Branch Chief at the time of the Miami incident, says
that she called Air Branch after receiving a call from the prime contractor's
secretary. She says that she then called Palmer who was waiting at a pay phone
and told him that "we're working on it via Customs, and sit tight."
The drafter of the March 26 memorandum says that it was standard procedure
for subcontractors to have the telephone number of the an air operations officer
in case there were maintenance problems with the aircraft. He states that
the problem CIA faced with contractor and proprietary aircraft was that they
looked like drug planes going back and forth regularly from Latin America
to Key West or Miami. He says Customs assumed that anyone flying from Latin
America was a possible drug trafficker. The aircraft and crews were suspect
because they came from Miami and fit the Customs profile. He asserts that
being branded a "druggie" by DEA or Customs did not mean much in
the 1980s. The Agency, he asserts, thought that Customs often overreacted.
According to an April 8, 1987 MFR by an OGC attorney, CIA officers met
with senior Customs officials on April 7, 1987 concerning the Miami DC-6 incident.
According to the MFR, "Customs . . . was concerned that, because of the
crews' records on this flight, some Agency flights could be used to smuggle
drugs." In addressing this concern, the MFR indicated that CIA reaffirmed
to Customs that CIA was not seeking any preferential treatment for Agency-sponsored
flights and that "CIA expect[ed] that these flights will be treated the
same as any other flights." This would include, according to the MFR,
the right of Customs agents to search the plane and its contents and to seize
According to the OGC attorney's MFR, the Customs officials were satisfied
that CIA's and Customs' understanding of the procedures were the same. However,
Customs "was still concerned that some crew members may have previous
involvement in drug trafficking." Customs officials then asked about
CIA procedures to "check the crews hired for the Central American flights."
The MFR indicated that an Air Branch Chief officer, explained that:
. . . we have several contracts with different aviation companies
and that while we trace the principal individuals with whom we are in contact,
it is possible that these principals sub-contract for others who are not necessarily
traced by us. In addition, the traces we do have been through Agency records
and do not necessarily include criminal records available to DEA and Customs.
According to the OGC attorney's MFR, Customs requested that CIA henceforth
supply Customs with not only the name of the pilot and tail number of the
aircraft, but also the names, dates and places of birth of all crew members
and passengers on Agency-sponsored flights so that Customs records could be
checked. Customs also asked CIA to supply this information for the crews and
passengers of all Agency sponsored flights dating back to August 1984. The
Air Branch officer "indicated that CIA had no problem in furnishing this
data and that he would forward it as soon as possible." The last paragraph
of the MFR indicated that:
One issue that was not fully addressed at the meeting is the Agency
policy on the use of pilots and crews who surface in Customs records with
suspected or known involvement in drug trafficking. It may be that Customs
will pay more attention to those flights whose crews are listed in their
records. This is an issue that needs to be addressed further. It was mentioned
in a preliminary fashion that we may wish to [question] suspected crew members
as to their activities during their employment with us.
The Air Branch Chief also recorded the meeting with Customs in an April
7 memorandum to the Chief of Special Activities Staff. That memorandum indicated
that he pointed out to the Customs officials that "It is virtually impossible
to check on every individual who becomes involved in sub-contract situations
Following the Miami DC-6 incident and the April 7, 1987 meeting with Customs,
ADCI Gates sent a memorandum to DDO Clair George on April 9, 1987 entitled
"Customs and Agency-Sponsored Flights to Central America." That
memorandum established more stringent vetting procedures for contractors and
prohibited CATF from using known or suspected drug traffickers:
It is absolutely imperative that this Agency and our operations
in Central America avoid any kind of involvement with individuals or companies
that are even suspected of involvement in narcotics trafficking. This must
be true not only of those with whom we contract, but also their subcontractors.
I believe it is essential that we obtain the names of all aircrew personnel
who have any association with Agency contractors or subcontractors and vet
those names through DEA, Customs and the FBI--even though this is likely
to be an onerous and occasionally inconvenient undertaking--and perhaps
even hamper operations at times.
In response to the Gates memorandum, CATF requested traces from DEA, Customs
and the FBI in April, May and June 1987 concerning Vortex/Universal, the prime
contractor and the officers and employees of those companies. DEA responded
in an April 28, 1987 memorandum from the DEA Deputy Assistant Administrator
for Intelligence indicating that Palmer had been arrested in Colombia in 1985
in connection with the seizure of an aircraft and 1,000 pounds of marijuana.
He was also, according to the DEA response, "criminally associated with
aircraft N22VX (formerly N3434F), which is suspected of off-loading 19,000
pounds of marijuana" in Northern Mexico destined for the United States
in September 1986.
The April 28, 1987 DEA memorandum stated that Herreros was "criminally
associated" with aircraft N3434F--the same aircraft that had been implicated
in the suspected drug smuggling incident involving Palmer in Mexico. DEA's
El Paso Intelligence Center had reported that Herreros had purchased this
aircraft for $125,000 in cash for the purpose of marijuana smuggling. DEA
also reported that Herreros was identified as being "criminally associated"
with various aircraft in FAA "lookouts" in the late 1970s, and as
an alleged part-owner of an aircraft that had been used to smuggle cocaine
The April 28 DEA memorandum also stated that Universal Air of Miami had
been incorporated by three individuals. These individuals were reportedly
investigated by DEA/Tucson for their association with a fourth individual
in the distribution of multi-kilograms of cocaine during 1984-1985.
Further, according to the DEA memorandum, an aircraft of the prime contractor
had been seized at a Colombian airstrip in January 1978 along with "165
tons of marijuana." The prime contractor was also linked to the seizure
of another aircraft in Colombia in January 1978, but the DEA memorandum did
not indicate whether the seizure was drug related.
The April 28, 1987 DEA memorandum also reported that an aircraft of the
prime contractor had been modified in 1981 in a manner that led the source
to believe the aircraft was to have been used for narcotics-related activity.
A December 12, 1988 memorandum to the LA Division Deputy Chief from a CATF
officer noted that " . . . these modifications are consistent with those
needed for [Contra] airdrop activity." An unsigned, handwritten note
in the margin of the CATF memorandum noted that there was "no activity
[by the prime contractor] for [CIA] during this period."
On May 13, 1987, Customs responded to the CIA trace request. The Customs
response indicated that Al Herreros, Vortex/Universal's president, was a suspected
drug trafficker. Customs' records reportedly indicated that Herreros "[was]
believed [in 1985] to be engaged in smuggling narcotics via aircraft"
and was doing business as Vortex Sales and Leasing. He was also reported to
be associated with "documented smuggler" John Lett. In a June 24,
1987 cable to CIA, Customs described the source of this information as "highly
reliable" and noted that the source had acquired the information from
An August 18, 1987 FBI cable to Headquarters--in response to a May 1, 1987
CIA cable--and the April 28, 1987 memorandum from the DEA Deputy Assistant
Administrator for Intelligence provided no derogatory information on the president
of the prime contractor. A May 13, 1987 cable from Customs to Headquarters
provided information that he had been involved in possible neutrality and
munitions control violations in 1977. The FBI, DEA and Customs responses to
the CIA trace request reported no links between him and drug trafficking.
The DEA and Customs trace responses also indicated that other employees of
Vortex/Universal and the prime contractor--Michael Palmer, Joseph Haas, Alberto
Prado Herreros, Maurico Letona, Martin Gomez, Donaldo Frixone, and two pilots
for the prime contractor--all of whom were affiliated with the CIA Contra
support program, may have been involved in narcotics trafficking prior to
their relationship with the Agency.(32)
OGC and the DO should work together with Customs to develop procedures
to ensure that these instructions are carried out on a continuing basis.
Furthermore, per my conversation with the Commissioner of Customs, it
should be clear that CIA seeks no preferential treatment with respect
to facilitating clearances and that Agency-sponsored flights are to be
treated the same as any other flights. In those rare instances where sensitive
cargo is involved, such Agency-sponsored flights will also be subject
to Customs search . . . .
On February 25, 1988, the Assistant General Counsel and an OGC attorney
met with a representative from DEA's Office of General Counsel regarding the
prosecution of Frank Correa--a Colombian drug kingpin. According to a March
8, 1988 Assistant General Counsel MFR regarding that meeting, the Agency became
aware of federal criminal prosecution against Correa who was indicted in Detroit
for drug trafficking. Palmer reportedly participated as a law enforcement
informant in the September 1987 sting operation that resulted in Correa's
arrest. The MFR stated that DEA provided funds for Palmer to lease a plane,
hire a crew and pick up a load of drugs in Colombia. Correa flew back to the
United States with Palmer and the drugs and was arrested when the plane landed
in Michigan. As a result of Palmer's cooperation in this case, DEA reportedly
was able to have Palmer's earlier indictment for drug trafficking dismissed.
The Assistant General Counsel's MFR also noted that Correa's attorneys
were alleging that Palmer was a CIA asset and that Vortex/Universal was an
Agency proprietary. The claims were based on an April 4, 1987 CBS news story
that alleged the Agency was protecting known drug dealers in order to carry
out secret operations in Central America and focused on the Miami DC-6 incident
The Assistant General Counsel was the OGC attorney responsible for any
Agency involvement in the Correa case. She recalls that Correa's lawyers sought
information concerning Palmer's relationship with the U.S. Government and
the Agency undertook a file search in response to a "discovery request"
As part of the file search that was initiated on April 6, 1988, for information
in response to the discovery request by Correa's lawyers, the SAS legal advisor
sent a cable to the former CATF contractor who had overseen support for the
Contras at the time and was now serving overseas. The SAS legal advisor's
cable requested, among other things, "any information you may have regarding
[CIA] suspicion or knowledge, or your suspicion or knowledge that Palmer and/or
his associates at Vortex/Universal Air Leasing were involved in narcotics
trafficking." The CATF contractor's April 8, 1988 reply stated that he
"had no suspicion or knowledge of Palmer/Vortex narcotics trafficking
On May 6, 1988, Agency officers--David Pearline, OCA; OGC's Assistant General
Counsel; the OGC attorney serving as CATF compliance officer; and three other
CATF officers--met with the president of the prime contractor to inform him
that the "Hughes Subcommittee on Crime" intended to subpoena him
as part of its investigation into alleged ties between CIA, the Contras and
drug trafficking. According to a May 9, 1988 OGC MFR regarding the meeting,
the president of the prime contractor stated that his company's relationship
with Palmer and Vortex/Universal began in late 1985 when CIA's SAS Air Branch
asked him to meet with Ambassador Duemling, Director of the NHAO. NHAO needed
to find a replacement for the company it was then using for humanitarian aid
flights. The president reportedly recommended Vortex/Universal and, after
speaking with Herreros, put Palmer in touch with the NHAO. The MFR noted that
he said he had only sporadic contact with Palmer during the time that NHAO
contracted with Vortex/Universal.
He also added at the May 6 meeting, according to the OGC MFR, that the
CATF contractor had checked Vortex/Universal and Palmer with U.S. Customs
and DEA at the time the NHAO was considering using Vortex/Universal as a carrier.
Both agencies, he said, gave glowing reports concerning Palmer and indicated
that he had worked with them on sting operations. The OGC MFR also indicated
that he said he had told the CATF contractor who oversaw support for the Contras
at the time in April 1986 that Palmer had been arrested by the FBI in Miami
on drug trafficking charges. He also said that a decision had been made at
that time that the president should have no further contact with Palmer. The
president of the prime contractor stated that Palmer's subsequent indictment--in
June 1986--was discussed in November 1986.
Agency records that describe the NHAO-Vortex/Universal relationship differ
in one respect from the statements of the president of the prime contractor.
A March 31, 1988 memorandum from the SAS legal advisor to the OGC Assistant
General Counsel stated that the president of the prime contractor had recommended
Palmer and Vortex/Universal to the NHAO, but made no mention of an Air Branch
request that the president of the prime contractor meet with Ambassador Duemling.
The former CATF contractor who oversaw support for the Contras at the time
of the NHAO's contract with Vortex/Universal also stated in his April 8, 1988
cable that responded to the SAS legal advisor's request for information that
the president of the prime contractor had recommended Vortex to NHAO on his
own initiative, and that either the former CATF contractor or Fiers had concurred
in the recommendation. The former CATF contractor's cable ended by pointing
out that the "NHAO was in a position to accept or reject any carrier."
According to the April 4, 1988 OCA MFR of a March 31 Agency briefing to the
HPSCI, HPSCI Staff member Dick Giza stated that Fiers had said in a February
2, 1987 briefing to HPSCI that he had referred NHAO to Vortex/Universal.
The president of the prime contractor says that he believes he learned
of Palmer's arrest from someone in the Agency, but he cannot be sure because
it was such a long time ago. Further, he recalls a lot of discussion with
Agency personnel in the fall of 1986 about Palmer's drug arrest. He recalls
that the attitude among the participants in these discussions was that the
Agency needed a plane that was "clean" and the fact that Palmer
had been indicted for drug trafficking was "irrelevant."
One of the air operations officers identified by the president of the prime
contractor says that he was told by an Air Branch officer, whose name he cannot
recall, at a meeting in late 1986 that Palmer had been under investigation,
but that everything was fine and Palmer was now in the clear. The officer
says he does not recall being told that Palmer had been indicted for drug
trafficking, but says the implication was that there were allegations that
Palmer was a drug trafficker.
A June 7, 1988 cable responded to a CIA/OIG request for information as
part of an investigation into the Agency's connection with Palmer. The cable
stated that the president of the prime contracting company had discussed Palmer
at a November 1986 meeting with FDN representatives. The president, according
to the cable, mentioned that Palmer had been "questioned for a possible
connection with drugs." Furthermore, the cable stated that Palmer had
"volunteered" information at a meeting at Vortex/Universal, that
he had been questioned about drug trafficking and that he had taken the issue
"very seriously and had legally cleared the issue." The officer
also stated in the cable:
I have no knowledge or information that would make me suspicious
that Palmer or Vortex [/Universal] were involved or connected with narcotic
trafficking. The up front attitude and explanation from Palmer about the
subject further dispelled suspicion.
Dupart states that he has no recollection of a May 1988 meeting at which,
as claimed by the president of the prime contractor, Palmer's indictment was
discussed, nor can he recall any other discussion of that subject with the
president. Dupart notes that, in the aftermath of the Iran-Contra affair,
matters like the Palmer case would not have been overlooked. The president,
Dupart observes, is "loose with the facts."
The OGC Assistant General Counsel recalls that the statement of the president
of the prime contractor at the May 1988 meeting that he had discussed Palmer's
arrest with a CIA official in 1986--prior to the March 21, 1987 Customs incident--caused
quite a stir at the meeting because Agency personnel realized this meant that
erroneous information had been given to Congress in the March 14, 1988 briefing.
At that briefing, Agency personnel had stated that CIA was not aware of Palmer's
arrest until after the Customs incident. Once they realized this, she says
they went back to Congress and corrected the error.
The OGC attorney who served as CATF compliance officer at the time, recalls
the May 1988 meeting. However, she says she has no recollection of a discussion
about drug trafficking. She says that, in general, drug trafficking was not
a priority at the time in CATF--"it would not hit a register." She
also has no recollection that any action was taken after the meeting. Two
of the other officers the MFR indicated had attended the May 1988 meeting
with the president of the prime contractor do not recall participating.
CIA's OIG opened an investigation regarding CIA's involvement with Palmer
in May 1988. The CIA/OIG Investigator says that she was assigned the investigation
on an "urgent basis." A May 16, 1988 memorandum from her to Inspector
General William Donnelly reporting the results of her investigation stated
that OIG opened the investigation as a result of "Congressional concern"
regarding allegations that "CIA had knowledge of and assisted Vortex
Aviation pilot Michael B. Palmer's drug activities."
A May 7, 1988 CIA/OIG cable to the former CATF contractor who oversaw support
for the Contras at the time informed him that the president of the prime contracting
company had said at the May 6 meeting that he had told the contractor about
Palmer's arrest in April 1986. The cable noted that the contractor had asserted
earlier in his April 1988 response to the SAS legal advisor's cable that he
was not aware of Palmer's involvement in narcotics trafficking and requested
that he "clarify the facts." The former CATF contractor responded
in a May 23 cable that he recalled being informed by the president of the
prime contractor of Palmer's arrest. While he said he could not recall the
exact date, it was after the NHAO flights ended.(33)
He also said he recalled that he "immediately" informed Fiers of
the information about Palmer's arrest. The former CATF contractor's cable
also said that he did not recall any other CATF personnel being present when
he advised Fiers of Palmer's arrest.
The former CATF contractor says he does not recall Fiers' response when
told about Palmer's arrest in April 1986, but he assumes Fiers told Ambassador
Duemling about it. The contractor states that he does not know much else about
the Agency's handling of the Palmer incident because he was transferred in
The former CATF contractor also states that he cannot explain why--after
being told of Palmer's arrest by the president of the prime contractor in
April 1986--he replied to the SAS legal advisor's cable in April 1988 that
he had no knowledge of it. He speculates that the SAS cable reached him when
he was in the field, and those were "long days with many things happening."
The Palmer issue, he says, was "probably not the most important thing
that happened that day." However, he says that the OIG cable noting the
comments of the president of the prime contractor jogged his memory when he
received it in May 1988.
Dupart asserts that, contrary to the former CATF contractor's account that
he reported Palmer's arrest to Fiers sometime in early-1986, CATF was not
aware of Palmer's arrest and indictment for drug trafficking until March 1987.
He says he does not believe the former CATF contractor told Fiers about Palmer's
arrest prior to March 1987 because the contractor would have had to go through
Dupart on a matter like this and he has no recollection of ever discussing
Palmer with the contractor. Moreover, Dupart states that "this was the
kind of thing Fiers would have discussed with me, and no such discussion ever
Fiers, in his written response to CIA/OIG questions, states that he does
not recall being told by the former CATF contractor about Palmer's arrest
in April 1986. Further, Fiers says that he has spoken "on the record"
about Vortex/Universal and Palmer--"perhaps with the Independent Counsel
[for Iran-Contra], perhaps with members of Congress." Fiers' written
response notes that he "certainly became aware" that Palmer was
"a problem" in the "late spring or early summer of 1987"
and that "he had to be distanced from Central America operations."
Fiers' written response states that "without going into extensive review
of the records to refresh my memory . . . I cannot comment further, other
than to say that I had no information that Palmer was using our operation
for drug smuggling." Fiers' written response asserts that he was unaware
of any rumors or conversations concerning Palmer and drug trafficking.
According to handwritten notes compiled by the OIG inspector in the course
of the May 1988 CIA/OIG investigation, a detailee to CATF ran traces on Palmer
in late December 1986 or early January 1987. The detailee reportedly stated
that there were "whisperings" about Palmer and the detailee "remembers
explicitly" that the traces showed Palmer was "under investigation"
for drug trafficking. The notes also stated that the detailee passed the derogatory
information about Palmer from the traces to Fiers, who passed the information
"on up the line and [a] decision [was] made at a higher level to go ahead
and use [Palmer]."
The OIG inspector's notes also stated that she discussed the information
provided by the detailee regarding the Palmer traces with the SOG CATF Deputy
Chief, who was the military detailee's supervisor beginning in May 1987. According
to the notes, the Deputy Chief "reluctantly" said that she thought
that the detailee was confused and that he was a "major stumbling block"
concerning traces and that the detailee was "unable to distinguish between
Agency and external traces" and that he believed there was "no need
to trace people." The OIG notes indicated that the Deputy Chief said
that she had to relieve the detailee of his duties "for cause,"
because he was causing unspecified problems.
The Deputy Chief says that she did not verify whether the detailee had
conducted traces on Palmer. She also says she does not recall learning that
a trace had been done regarding Palmer in December 1986 or January 1987, prior
to the April/May 1987 traces. The March 21, 1987 Miami DC-6 incident was when
Palmer first "burst on people," the Deputy Chief states.
The May 16, 1988 inspector's memorandum to IG Donnelly providing the results
of her investigation regarding the Agency's involvement with Palmer stated
her conclusion that allegations that CIA had knowledge of and assisted Palmer's
drug trafficking activities were "without foundation." Further,
the memorandum concluded that:
. . . there is no basis for the allegation that an Agency employee
was aware of Mr. Palmer's drug activities when that employee concurred in
a recommendation of Palmer/Vortex, made by . . . [the president of the prime
contracting company] circa December 1985-January 1986 to the . . . Nicaraguan
Humanitarian Assistance Office.
The memorandum did not mention any allegation or information indicating
that CATF may have decided to use Vortex/Universal and Palmer after CATF
reportedly became aware of Palmer's arrest and later indictment on drug
trafficking charges. No information has been found to indicate that CIA/OIG
produced a formal report concerning this investigation, or that the OIG
inspector's May 1988 memorandum was made available to CIA management by
The OIG inspector says that she did not address the question of CATF's
relationship with Vortex/Universal in her memorandum because she did not have
enough facts at the time to reach a conclusion. She states that no one she
interviewed could recall much about Palmer's drug arrest. Moreover, she says
that she received little cooperation from CATF or the DO in response to her
requests for documents. She recalls that CATF records "were unavailable,
unobtainable and undiscoverable."
She states that she tried to interview Dupart at the time regarding the
Palmer issue, but he refused to discuss the matter because he had moved to
one of the Intelligence Oversight Committee Staffs--HPSCI--and he believed
commenting on the matter would be inappropriate. She says she never got around
to interviewing Fiers because she was assigned another urgent investigation
into Agency activities in Honduras. Dupart says he has never refused a request
to be interviewed by OIG.
She does not know why there is no record of a final CIA/OIG report concerning
the Palmer investigation, but speculates that it may have been because she
was told to drop everything she was working on in June 1988 to focus on the
investigation involving Honduras. She says the Palmer issue may have "fallen
through the cracks" as a result. No information has been found to indicate
that the Palmer matter was examined subsequently by any CIA component other
Information Sharing with Other U.S. Government Entities. On March
14, 1988, according to a March 29 MFR prepared by OCA's David Pearline, he
and OGC's Assistant General Counsel described the circumstances surrounding
the Miami DC-6 incident and the Agency's relationship with Palmer to the Judiciary
Subcommittee on Crime Staff members. The Staff members reportedly asked whether
the Agency had realized that Palmer was a DEA informant who had been indicted
for drug trafficking. OGC's Assistant General Counsel responded, according
to the MFR, that the Agency was not aware of Palmer's indictment or his DEA
connection until the Miami DC-6 incident. On learning of his indictment, she
said, the Agency terminated the relationship with Palmer and Vortex/Universal
Air. This information was also conveyed to the SSCI and HPSCI Staffs on March
31, according to the MFR.
According to an April 4, 1988 MFR regarding the March 31 briefing to HPSCI
Staff members, OCA expressed concern that Palmer would reveal the Agency's
ties to the prime contractor at his upcoming testimony before the House Judiciary
Committee Subcommittee on Crime. Further, OCA informed the HPSCI Staff members
that the Agency anticipated that the Crime Subcommittee would press for operational
information in its investigation into drug smuggling by the Contras. OCA requested
the HPSCI's assistance in handling these inquiries. The MFR indicated that
Michael O'Neil of the HPSCI Staff responded that the Judiciary Committee's
inquiry had the full support of HPSCI members and that the HPSCI was not in
a position to provide any assistance to CIA in limiting the Judiciary Committee's
probe into intelligence activities that related to its investigation.
Following the May 6, 1988 meeting, the president of the prime contractor,
OGC's Assistant General Counsel, Pearline, and two CATF officers met on May
11 with two House Judiciary Subcommittee on Crime Staff members. A May 16
OCA MFR concerning that meeting reported that OCA had corrected the information
given earlier to the Subcommittee Staff regarding when the Agency first learned
that Palmer had been arrested for drug trafficking. OCA reportedly said that:
. . . at least two Agency officers (Fiers and the [former CATF
contractor]) knew about Palmer's drug dealing before the Agency agreed to
buy an aircraft from [Vortex/] Universal Air Leasing and approved the subcontracting
... to [Vortex/] Universal Air Leasing of the servicing of aircraft flying
resupply flights for the Contras.
OCA reportedly also informed the Staff members that the Agency was "still
looking into this matter." The Subcommittee Staff requested that the
Agency inform it of the results of any investigation. The same information,
according to the MFR, was shared with David Holliday of the SSCI Staff and
O'Neil of the HPSCI Staff on May 13 and May 16, respectively.
No information has been found to indicate that the results of the 1988
CIA/OIG investigation or any other CIA inquiry into this matter were communicated
to the SSCI, HPSCI, or the House Judiciary Subcommittee on Crime.
CIA Vetting Role. As noted earlier, Agency records indicate that
the president of the prime contracting company claimed in 1988 that he had
met with Ambassador Duemling of NHAO in 1985 and, during the course of the
meeting, had recommended that NHAO utilize Vortex/Universal. However, Agency
records differ in whether he says he contacted Ambassador Duemling on his
own initiative or if he was responding to a request from CIA officials that
he meet with the Ambassador. In any event, an April 4, 1988 OCA MFR indicated
that HPSCI Staff member Dick Giza said that Alan Fiers had said in a February
2, 1987 briefing to HPSCI that he had referred NHAO to Vortex/Universal. Fiers'
written response to OIG questions also indicates CIA played some role in steering
NHAO to Vortex/Universal since Fiers states that he "specifically recalls
discussions with Ambassador Duemling" pertaining to the vetting of air
carriers for NHAO.
Background. According to the December 1988 Kerry Report, one of
the pilots who flew Contra resupply missions for SETCO was Frank Moss. The
Kerry Report also noted that Moss had been under investigation since 1979
for drug trafficking but reportedly was never indicted. In 1985, Moss formed
his own company, Hondu Carib, which flew supplies to the FDN. The Kerry Report
indicated that the FDN's arrangement with Moss and Hondu Carib was based on
a commercial agreement between Moss and Mario Calero, the FDN's chief supply
officer. Under that agreement, Calero was to receive an ownership interest
in Moss' company.
Also according to the December 1988 Kerry Report, one of the Moss planes
that was used to ferry supplies to the Contras was chased off the west coast
of Florida by the Customs Service while it was dumping what appeared to be
a load of drugs. When the plane landed in Port Charlotte, Florida, an inspection
revealed significant marijuana residue on board. The plane reportedly was
seized by the DEA in March 1987.
Allegations of Drug Trafficking. On March 31, 1984, Headquarters
was informed by cable that Moss was among a group suspected of using a DC-4
owned by Hondu Carib in drug and arms trafficking through the Merida, Mexico
International Airport. The aircraft reportedly flew from the United States
to Honduras or Guatemala and then to Merida, ostensibly to pick up fish for
export to Tampa. The aircraft had reportedly been searched by Mexican authorities
and DEA agents with negative results. However, DEA agents were suspicious
because of the aircraft's circuitous route and the fact that all of the individuals
connected with the plane had previous drug trafficking records. This information
reportedly had been brought to the CIA's attention by DEA because Moss and
the others had claimed at the time of the search that they were connected
with or worked for the Agency. No information has been found to indicate that
Headquarters responded to the March 1984 cable.
A July 9, 1984 cable to Headquarters described Moss' company, Atlas Aviation,
as a "shoestring cargo operation and hungry for business," that
was "normally employed in transporting fresh fish and fruits from Central
America and Mexico to the United States." The cable noted, however, that
Atlas' "business profile fits the U.S. Customs narcotic trafficking profile,"
and the company was in the Customs computer as a "suspicious operation."
Consequently, Atlas was "closely watched and thoroughly checked at all
U.S. airports of entry and in Mexico, but not in other countries." Nonetheless,
according to the cable, Atlas had a "clean record" with Customs
and "will not become involved in drug trafficking or any other illegal
activity which could damage their record."
The July 1984 cable also pointed out, however, that Atlas is "hungry
enough to walk a thin line in other countries," and that the company
was aware of all international traffic regulations and procedures and "how
to circumvent them if necessary." The Station added that Atlas had accomplished
"very confidential modifications on [sic] low profile customers
and aircraft for sensitive use."
As mentioned earlier, the Kerry Report indicated that one of the planes
Moss used to carry Contra supplies had been seized in March 1987 by DEA after
dumping what appeared to be drugs off the Florida coast and that significant
marijuana residue was found on board at the time. According to an April 28,
1987 cable, the names of two CIA officers and their telephone numbers were
included in Moss' notes that were seized by DEA when the aircraft was confiscated.
At an April 7, 1987 meeting between CIA and Customs officials in connection
with the March 1987 Miami incident involving Michael Palmer and a DC-6 Vortex/Universal
aircraft, Customs officials also raised issues relating to the March 1987
seizure of Moss' DC-4. According to the April 7 memorandum summarizing that
meeting that was prepared by the Air Branch Chief, Customs was informed that
"there is no linkage of this aircraft or Mr. Moss to [CIA]."
A May 12, 1989 FBI report concerning Moss indicated that DEA's search of
Moss' aircraft in March 1987 had resulted in no narcotics evidence being discovered
and that the aircraft had subsequently been released to Moss. Further, the
FBI report noted that Customs had an open case on Moss as of November 1988,
but there was no evidence to substantiate the drug trafficking allegations
On May 26, 1987, a cable reported to Headquarters that Moss was trying
to generate business with the FDN by offering to fly air resupply drops inside
Nicaragua. CATF responded on June 3 that it was concerned about Moss' possible
ties to "druggers and the FDN." Headquarters also requested that
the field "look into the ties with Moss and the FDN further and keep
us advised." No information has been found to indicate that any further
action was taken or that any additional information was generated in response
to this request.
A former CATF NOG Chief's initial recollection was that Moss may have been
involved briefly with the Contra program, but that the Agency's relationship
with him was terminated on the basis of something that happened with respect
to keeping files on an aircraft. However, based upon further reflection and
review of relevant records, he stated that Moss may have actually flown "stuff"
for the Private Benefactors, not the Agency. No other Agency officers could
recall any relationship between the Agency and Moss or his company. No information
has been found to indicate any relationship between CIA and Moss or his company
at any time.
Information Sharing with Other U.S. Government Entities. Apart from
the meeting with Customs officials on April 7, 1987, no information has been
found to indicate that the Agency provided information concerning Moss or
his company to other U.S. Government intelligence or law enforcement agencies
or the Congress.
CIA Vetting Role. A February 25, 1986 Headquarters cable noted that
Moss had approached the NHAO in early 1986 with a proposal for Hondu Carib
to provide air services for the NHAO. The cable requested information on the
company's suitability for flying NHAO cargo missions. No information has been
found to indicate there was a reply to this request. No information has been
found to indicate that Agency personnel retrieved and considered the March
and July 1984 cables regarding Moss and his companies or that the Agency requested
further information from U.S. law enforcement agencies concerning Moss or
Hondu Carib at this time. No information has been found to indicate whether
CIA provided any information regarding Hondu Carib to the NHAO.
A February 26, 1986 Headquarters cable indicated that the Agency received
an inquiry from NHAO in February 1986 regarding the use of Hondu Carib as
a conduit for the delivery of humanitarian assistance to the Contras.
Allegations Involving Other Companies Associated With the Contras
Allegations were made regarding two companies, Southern Air Transport and
Markair--that were involved in supporting the Contras.
Southern Air Transport
Background. Southern Air Transport (SAT) carried a variety of equipment,
supplies and humanitarian aid for the FDN during the 1980s.
Allegations of Drug Trafficking. A January 21, 1987 memorandum from
ADCI Robert Gates to Morton Abramowitz, Assistant Secretary of State for Intelligence
and Research, stated that the U.S. Customs Service had advised CIA that the
Customs office in New Orleans was investigating an allegation of drug trafficking
by SAT crew members. The Gates memorandum noted that the source of the allegation
was a senior FDN official. The memorandum indicated that the FDN official
was concerned that "scandal emanating from Southern Air Transport could
redound badly on FDN interests, including humanitarian aid from the United
A February 23, 1991 DEA cable to CIA linked SAT to drug trafficking. The
cable reported that SAT was "of record" in DEA's database from January
1985-September 1990 for alleged involvement in cocaine trafficking. An August
1990 entry in DEA's database reportedly alleged that $2 million was delivered
to the firm's business sites, and several of the firm's pilots and executives
were suspected of smuggling "narcotics currency."
Information Sharing with Other U.S. Government Entities. As previously
noted, a January 21, 1987 memorandum from ADCI Robert Gates to Morton Abramowitz,
Assistant Secretary of State for Intelligence and Research, reported that
U.S. Customs had informed CIA that the Customs office in New
Orleans was investigating an allegation of drug trafficking by SAT crew members.
Background. A June 24, 1986 Headquarters cable indicated that Markair
flew the last three support flights for NHAO in late June 1986.
Allegations of Drug Trafficking. On October 14, 1987, CIA requested
traces concerning Markair from U.S. law enforcement agencies. The October
21 Customs Service response reported that the company was "strongly suspected"
of owning an aircraft that had been used in 1984 to smuggle cocaine into the
United States from South America. Further, according to Customs, the aircraft
was sold that same year by Markair to "a large scale . . . [unnamed]
drug trafficking organization recently convicted in federal court." Customs
reported also that it was investigating the financial activities of Markair
and its officers because of "large cash movements to and from Mexico
and other foreign countries."
An October 26, 1987 MFR by the CATF Deputy Chief indicated that he had
contacted the Intelligence Section of the Customs Service that same day to
determine whether the information in the Customs response to the CIA trace
request was "sufficiently well-sourced to exclude Markair from contracting
with the U.S. Government." According to the MFR, the Customs Intelligence
Section indicated that the drug trafficking information was "only speculation."
The MFR stated that Customs reportedly had confirmed that Markair had sold
the aircraft to a major narcotics smuggling ring, but "the sale to this
group may have been a legitimate business deal and not drug related."
According to the MFR, Customs indicated that the information concerning Markair
officers carrying large quantities of cash was "certain," but the
Intelligence Section reported that "such behavior is common in the air
charter business and thus is not by itself suspicious. Customs advises there
is no current investigation open involving Markair." The MFR concluded
by noting that the Customs Intelligence Section "would not exclude"
the use [by the U.S. Government] of Markair "solely on the basis of information
in Customs' files."
Information Sharing with Other U.S. Government Entities. As noted
earlier, an October 26, 1987 MFR indicates that the CATF Deputy Chief contacted
the Intelligence Section of U.S. Customs on October 26 to discuss information
provided by Customs regarding suspected drug trafficking activities by Markair.
[Paragraphs 913 to 961 removed]
Allegations Involving Air Crew Members of Companies that
Provided Services to the Contras Under Contract or Subcontract with CIA
- Background. Following the March 21, 1987 incident
at the Miami airport involving U.S. Customs and an Agency DC-6 operated by
Michael Palmer of Vortex/Universal Air Leasing, ADCI Gates sent a memorandum
to DDO Clair George on April 9, 1987 directing that all contractor and subcontractor
air crew personnel be vetted with DEA and the U.S. Customs Service as well
as with the FBI. This was necessary, wrote Gates, to protect the Agency against
even indirect involvement with drug trafficking.
- Thereafter, CATF requested traces during April, May and June 1987 from
DEA, U.S. Customs and the FBI concerning employees of Vortex/Universal and
the prime contracting company. In addition to linking Michael Palmer and Al
Herreros of Vortex/Universal to drug trafficking, information provided by
DEA and Customs in response to these CIA trace requests also indicated that
two employees of the prime contractor and seven employees of Vortex/Universal
were suspected of having drug trafficking connections.
- Moreover, CIA, through the use of a trusted resource, developed information
to indicate that three other individualsall of whom were employed by
the prime contractormight have some connection to drug trafficking.
- A Prime Contractor Pilot. According to DEA information provided
to CIA on April 28, 1987 a contractor pilot was:
. . . listed as the pilot of [aircraft registration number] .
In 1981, the aircraft was placed on lookout because [he] was suspected of
smuggling drugs into the United States from the Bahamas. The lookout was
- According to Customs information provided to CIA on May 13, 1987 from the
Treasury database, the pilot was the subject of a 1982 report of alleged drug
smuggling. According to the Customs report, he was alleged to have used an
aircraft with the same registration number that was cited in the April 28,
1987 DEA information.
- A June 1, 1987 CIA cable to Customs requested further information on the
pilot and three other individuals in an attempt to determine the validity
of the information that Customs had provided to CIA in its May 13, 1987 cable.
According to the June 1 cable, CIA:
. . . . would appreciate details on the sources of information,
including any available assessments on the reliability of the sources and
their access to the information (for example, whether through direct involvement
in the alleged activity or via hearsay). . . .
In its June 24, 1987 response, Customs referred the CIA to the U.S. Coast
Guard for further information pertaining to the pilot. However, no information
has been found to indicate CIA contacted the U.S. Coast Guard regarding
- On April 29, 1986, the pilot was questioned by CIA Security as part of
the clearance process to work under the prime contractor. A May 1, 1986 report
of that questioning indicated that the pilot admitted to extensive use of
illegal drugs and to selling marijuana to friends on several occasions in
the late 1960s and early 1970s. He claimed that these sales occurred at social
functions and that he did not make a profit from this activity. The report
noted that although he was questioned intensively on these matters, CIA concluded
that his answers were probably credible. According to the report, the pilot
was advised of CIA's policy regarding the illegal use of drugs and he agreed
to abide by that policy.
- A December 22, 1988 CIA memorandum indicated that an aircraft that Customs
identified as belonging to the prime contractor and suspected of drug smuggling
in 1981-82 had been sold by the prime contractor in November 1979, but subsequently
had been stored at the prime contractor's facility. It was unclear, the MFR
noted, whether the pilot had been flying this aircraft as an employee of the
prime contractor or as a charter pilot for the new owners. The December 1988
MFR indicated that more information would be needed from Customs in order
to determine whether the aircraft and the pilot had actually been involved
in drug trafficking. No information has been found to indicate that CIA sought
additional information from Customs or any other source to follow-up or verify
- No information has been found to indicate that the results of questioning
regarding drug use by the pilot were provided to U.S. law enforcement agencies.
No information has been found to indicate that information regarding allegations
of drug trafficking by the pilot was provided to Congress.
- A Second Prime Contractor Pilot. According to a June 8, 1987 DEA
cable, a second pilot was suspected of being "the pilot of an aircraft
that was placed on lookout [sic] for suspected drug smuggling."
- He was hired on June 25, 1987 as a pilot for the Contra program with temporary
- An October 21, 1987 Headquarters cable indicated that the pilot had resigned
from the Contra program. An October 23 cable to Headquarters urged that a
strong effort be made "to try and turn him around," because he was
"unquestionably the premier DC-6 captain." On December 3, Headquarters
cabled that the pilot had agreed to continue in the Contra program. A December
10 Headquarters cable indicated that "investigative efforts" were
underway to "clarify" the drug trafficking allegations. The cable
stated that questioning by CIA Security "will be scheduled as soon as
- No information has been found to indicate any further investigative efforts
were pursued by CIA. No information has been found to indicate when CIA's
relationship with the pilot was actually terminated.
- No information has been found to indicate that information regarding allegations
of drug trafficking by the pilot was provided to Congress.
- An Aircraft Mechanic. CIA Security questioned this mechanic was
conducted on December 2, 1986. According to the report cabled to Headquarters
on April 3, 1987, the information provided by the mechanic led CIA to conclude
that he was probably involved in drug trafficking. Further, the report indicated
CIA's view that, even under intense questioning, he was also withholding information
regarding people he knew who were involved in the Contra program and drug
trafficking. According to the report, the mechanic refused to identify any
of these individuals, although he claimed that one of them had recommended
him for the Contra program.
- An April 20, 1987 Headquarters cable provided instructions that the mechanic
was to be removed from his job pending the results of a second round of questioning
by CIA Security. An April 24, 1987 memorandum from the LA Division Chief to
DDO Clair George and the Director of Security indicated that the mechanic
had been advised that he would have to undergo a third round of questioning
to resolve the drug trafficking questions.
- The mechanic was questioned again on May 10, 1987. According to the Security
report of June 22, the mechanic admitted to smuggling a small amount of marijuana
for his personal use into the United States in 1968. He also admitted that
he "fostered drug transactions on a few occasions" while with the
U.S. military in Vietnam. He reportedly asserted, however, that he never personally
dealt illegally in drugs. Based on the information he provided, CIA concluded
that his answers were probably credible. The report, however, did not indicate
whether he was questioned regarding the other individuals in the Contra program
who might be involved in drug trafficking and to whom he had referred in December
- No information has been found to indicate that the Agency took any further
action to pursue or verify the information regarding the mechanic or to determine
the identities of the other individuals.
- No information has been found to indicate that information regarding allegations
of drug trafficking by the mechanic was provided to Congress or to other U.S.
- A Third Pilot. This pilot was hired by the prime contractor in November
1986 in support of the Contra program and was questioned by CIA Security on
December 2 and December 4, 1986. As a result of the information the pilot
provided on both dates, CIA concluded that this pilot was probably involved
in drug trafficking. The pilot was questioned further on December 11 and December
12, 1986 without the issues being clarified.
- No information has been found to indicate that the Agency took any further
action to pursue or verify the information developed during questioning by
- No information has been found to indicate that information regarding drug
trafficking by the pilot was provided to Congress or to other U.S. Government
- A Fourth Pilot. This pilot was hired by the prime contractor for
the Contra program in late 1986. He was questioned by CIA Security on December
2 and December 3, 1986. Based on the information he provided, CIA concluded
that the questioning was not productive.
- No record has been found to indicate any further action by CIA to follow-up
or verify this information. No information has been found to indicate to what
extent or for how long he was employed by the prime contractor to support
CIA's Contra program.
- No information has been found to indicate that information regarding drug
trafficking by the pilot was provided to Congress or to other U.S. Government
- Vortex/Universal employees. The seven individuals identified through
DEA and Customs trace responses as suspected drug traffickers who were employed
by Vortex/Universal were:
- Joseph Haas
- Donaldo Frixone
- Martin H. Gomez
- Martin Alberto Gomez
- Irving Silva
- Mauricio Letona
- Stephen Herreros.
- According to information DEA provided to CIA on April 28, 1987, Haas, Frixone,
Silva, and Stephen Herreros had been implicated with Michael Palmer in a September
1986 drug smuggling incident in northern Mexico involving 19,000 pounds of
marijuana destined for the United States. The DEA response also reported that
Haas, Frixone and Martin Alberto Gomez had been crew members on the DC-6 that
was involved in the March 1987 incident at Miami International Airport.
- Joseph Haas. Haas was reportedly a long-time informant for a U.S.
law enforcement agency.
- Haas had been hired by Vortex/Universal in December 1986 to assist in providing
crew support for air drops in support of the Contras. The April 28, 1987 DEA
memorandum appears to have been the first indication to the Agency that Haas
was suspected of involvement in drug trafficking and had been a suspected
marijuana trafficker since 1984. According to an April 7, 1987 MFR prepared
by a CIA Contracts Branch Chief regarding a conversation she had with the
president of the prime contractor on that date, Haas had been "taken
off" CIA's payroll as of April 1 because he had gone to work for a U.S.
law enforcement agency in the United States. No information has been found
to indicate that the Agency had any further contact or relationship with Haas.
- DoJ and DEA requested information from CIA concerning Haas in 1985, 1987
and 1991. A December 16, 1987 OGC memorandum indicated that the Assistant
U.S. Attorney for the Eastern District of New York requested CIA information
concerning Haas in May 1985 because he was likely to be a witness in an arms
smuggling case--U.S. v. Schwartz and Berg, et al.
- A December 7, 1987 letter from the U.S. Attorney for the Eastern District
of New York again requested information from CIA regarding its relationship
with Haas in connection with the "Berg" prosecution because of "inquiries
from the press, and from defense counsel, asking if Haas is involved in any
type of covert operations to aid the Nicaraguan contras [sic]."
These inquiries, according to the letter, also involved questions concerning
the "Vortex Affair." The letter indicated that Haas' involvement
with CIA might be used by the defense to "impeach Haas' testimony"
as a witness for the prosecution.
- An undated internal CIA memorandum in response to the U.S. Attorney's December
1987 request indicated that Haas had been "a contractor of Vortex/Universal
which was a subcontractor of an Agency prime contractor." The memorandum
noted that Haas had been employed by Vortex/Universal from "approximately
December 1986 to April 1987." In answering the U.S. Attorney's request
regarding any relationship between CIA and Haas, the memorandum made no mention
of the April 1987 DEA and Customs trace responses that linked Haas to drug
- On September 9, 1988, CIA received a request for information from the DEA
Administrator concerning Haas and Michael Palmer. ADCI Gates responded to
the request in an October 1988 memorandum that briefly outlined the CIA's
relationship with Haas, and indicated that the "Agency has had no contact,
direct or indirect, with Haas since April 1, 1987." ADCI Gates' memorandum
also noted that the Agency had directed that the prime contractor sever its
ties with Vortex/Universal following the March 21, 1987 Miami airport incident
involving U.S. Customs and the subsequent discovery of drug trafficking information
relating to Haas.
- An October 4, 1988 memorandum to the Director of Congressional Affairs
from David Pearline of OCA's Legislative Division indicates that CIA may have
informed the House Judiciary Committee of information pertaining to Haas.
According to the memorandum, which discussed an October 3, 1988 meeting between
Pearline and Congressional staff employees Haydon Gregory and Jim Dahl of
the House Judiciary's Subcommittee on Crime:
. . . .
3. The Committee staff also made two additional inquiries while I was present.
The first inquiry concerned the relationship we had with Joseph Haus [sic],
a pilot who flew resupply flights for the Contras. The staff felt we may
have provided some information on Mr. Haus [sic]. (FYI: I checked
my memos for the record on our earlier briefings and could not locate a
reference to Mr. Haus [sic], but the CATF compliance officer believes
we may have provided some information during a briefing of the staff in
. . . .
- Donaldo Frixone. Frixone was, according to information DEA
provided to CIA on April 28, 1987, implicated along with Michael Palmer and
others in the September 1986 drug smuggling incident in northern Mexico involving
19,000 pounds of marijuana destined for the United States. Frixone was hired
by CIA for Contra aerial missions from early 1983 to June 1985. Frixone's
relationship with CIA was terminated in June 1985 for Frixone's refusal to
follow his supervisor's instructions.
- Following the termination of his relationship with CIA, Frixone was hired
by Vortex/Universal in late 1986 or early 1987 as a pilot in support of Contra
logistics operations. Frixone was killed on January 23, 1988 when his aircraft
was shot down during an air drop over Nicaragua.
- On July 13, 1983, CATF cabled a Station and requested that it verify allegations
made in May 1981 that Frixone had been arrested on a drug trafficking charge.
The Station replied on July 22 that it had received confirmation that Frixone
had been arrested for drug trafficking in the Dominican Republic in August
- Frixone was questioned by CIA Security on July 19, 1983. According to the
report, Frixone said that he had been arrested for trying to steal an airplane
in the Dominican Republic, but was exonerated by a jury. The report did not
mention the drug charge, but noted that "upon instruction by [a CIA]
representative, [the Security Officer] did not [follow up on] the subject's
story" of the arrest incident. No information has been found to indicate
that CIA undertook any further action to follow up or verify the information
about Frixone's arrest for drug trafficking before the termination of the
initial Agency relationship with him in June 1985.
- A May 20, 1987 cable indicated that Frixone had admitted to Dominican police
that he and his accomplices were planning to go to Colombia to pick up marijuana
and that he was to be the pilot. The cable added that Frixone and the others
had been released by the judge in November 1980 because of "insufficient
- A June 30, 1987 Headquarters cable indicated that the allegations against
Frixone and several others would have to be "clarified" before approval
to use them could be initiated. Further, the cable stated that investigative
efforts were underway and that all the individuals would be questioned by
Security "as soon as possible."
- No information has been found to indicate that Frixone was questioned again
or that further investigative efforts were made in this regard by CIA or other
U.S. Government entities.
- No information has been found to indicate that information regarding allegations
of drug trafficking by Frixone was provided to the Congress or to other U.S.
- Martin Horatio Gomez. Gomez, a native of Medellin, Colombia, was
an aircraft mechanic for Vortex/Universal. After about nine months, his contractual
relationship with the Agency was terminated on March 8, 1989 for "lack
- The Agency was informed by DEA and Customs in April and May 1987 that Gomez
was "criminally associated" with aircraft N50314. According to the
April 28, 1987 DEA memorandum, the aircraft was owned by a Miami company and
was suspected of being used to transport marijuana or cocaine from Colombia
to the United States. On May 13, 1987, Customs provided information to CIA
that indicated that Gomez had been suspected of involvement in currency and
narcotics smuggling as of 1984 and that he was associated with "numerous
alleged narcotics traffickers. . . ."
- A June 1, 1987 CIA cable to Customs requested further information on Gomez
and three other individuals in an attempt to determine the validity of the
allegations. According to the June 1 cable, CIA:
. . . . would appreciate details on the sources of information,
including any available assessments on the reliability of the sources and
their access to the information (for example, whether through direct involvement
in the alleged activity or via hearsay). . . .
In its June 24, 1987 response to CIA, Customs reported it had no additional
information regarding Gomez.
- No information has been found to indicate that Gomez was questioned by
CIA Security. No information has been found to indicate that information regarding
allegations of drug trafficking by Gomez was provided to the Congress.
- Martin Alberto Gomez. Gomez, an aircraft mechanic, became
a naturalized U.S. citizen in July 1986. CIA was informed by DEA on April
28, 1987 that Gomez allegedly had been involved in a drug smuggling organization
as of 1981. Another alleged member of that organization was Martin Horatio
Gomez, whom the DEA response indicated might have been his father.
- Martin Alberto Gomez was questioned by Security on August 29, September
1, and November 3, 1988. The totality of the information he provided led CIA
to conclude that he probably was involved in drug trafficking.
- In an October 5, 1988 memorandum, an officer in the Office of Security
wrote that Gomez "has not cooperated during [two attempts to question
him] and it is not likely his attitude will change with additional processing."
The memorandum therefore recommended that "[the cognizant CIA office]
be requested to cancel interest" in Gomez. A November 15, 1988 memorandum
from an Operational Evaluation Section officer to the Chief of the Staff and
Operations Branch indicated that SAS had refused to "cancel interest"
in Gomez, and that he was given a third opportunity for clarification on November
3, 1988. According to the memorandum, major concerns remained concerning the
use of illegal drugs." His relationship with CIA was terminated in "mid-March
- No information has been found to indicate that information regarding drug
trafficking by Gomez was provided to the Congress or to other U.S. Government
- Irving Silva. Silva, as noted in the April 28, 1987 DEA report,
was implicated with Palmer in the September 1986 drug smuggling incident in
northern Mexico involving 19,000 pounds of marijuana destined for the United
- According to a February 29, 1988 memorandum to OGC's Assistant General
Counsel regarding CIA contacts with Vortex/Universal Air Leasing, Silva was
employed part-time by Vortex/Universal from December 1986 to January 1987
to provide navigational training to the ERN. The April 28, 1987 DEA trace
response implicated Silva in the September 1986 Mexico marijuana smuggling
- No information has been found to indicate that Silva was questioned by
CIA Security or that the Agency took other action to follow-up or verify the
information linking Silva to drug trafficking. No information has been found
to indicate when CIA terminated its relationship with him.
- No information has been found to indicate that information regarding allegations
of drug trafficking by Silva was provided to the Congress.
- Mauricio Letona. Letona apparently was hired by Vortex/Universal
in late 1986/early 1987 along with Haas and others under the subcontract with
the prime contractor in support of CIA assistance to the Contras.
- The Agency terminated its relationship with Letona on May 8, 1987. A May
13, 1987 Customs cable to CIA indicated that Letona had been suspected in
1980 of using his affiliation with an El Salvadoran airline to smuggle cocaine.
- No information has been found to indicate that information regarding allegations
of drug trafficking by Letona was provided to the Congress.
- Stephen Herreros. The April 28, 1987 DEA response to a CIA trace
request reported that Herreros was listed in the files of the El Paso Intelligence
Center as having been involved in the September 1986 marijuana smuggling incident
along with Palmer and other Vortex/Universal employees.
- No information has been found to indicate the nature of Herreros' relationship
with Vortex/Universal or that he had any relationship with CIA. No information
has been found to indicate that CIA took any action regarding the information
relating to Herreros and drug trafficking.
- No information has been found to indicate that information regarding allegations
of drug trafficking by Herreros was provided to the Congress.
What was the nature and extent of CIA's knowledge of allegations
of Contra drug trafficking at the Ilopango Air Base?
- Background. Between 1981 and the 1984 congressional funding cutoff,
the Agency provided support services to the Contra program from the El Salvadoran
air base at Ilopango--located a few miles to the east of San Salvador. Ilopango
Air Base was controlled by the Salvadoran military but was used by CIA as
a storage point and staging area for shipments of supplies to the Contras.
In the course of these functions, CIA personnel had frequent contacts at Ilopango
with Contra pilots and other personnel who came to Ilopango to pick up supplies.
CIA personnel were frequently present at Ilopango and sometimes assisted when
supplies were loaded onto aircraft operated by Contra pilots.
- To support CIA activities at Ilopango, CIA occupied a newly constructed
warehouse and hangar in 1984--commonly referred to as Hangar 5--and relocated
to it activities that had been conducted in a smaller nearby hangar-- commonly
referred to as Hangar 4. After CIA had moved out of Hangar 4, it was used
in 1985 and 1986 by NHAO and the Private Benefactors in support of their Contra-related
operations. Hangars 4 and 5 shared a common aircraft parking area and were
located on a restricted area of the Ilopango air base that was controlled
by the Salvadoran military. Another area of Ilopango air base was devoted
to civil aviation. Access to that area reportedly was not restricted.
- Following the 1984 congressional funding cutoff, supplies that remained
at Ilopango were distributed to the Contras by CIA personnel. Thereafter,
visits by CIA personnel to Ilopango occurred less frequently. Contra personnel,
however, continued to visit Ilopango in connection with support being provided
to the Contras by NHAO and the Private Benefactors.
- Following congressional approval of the $100 million Contra support program
in October 1986, Ilopango Air Base had much less importance to the Contra
- There have been three main sources of allegations of drug trafficking at
Ilopangoa U.S. citizen, Celerino Castillo(34)
and a CIA/DEA source known as STG6. The allegations of each of these sources
and what CIA knew about them are described below.
- Allegations of Contra drug trafficking at Ilopangoa U.S. citizen.
According to an October 23, 1986 cable to Headquarters, the "narcotics
coordinator" at the U.S. Embassy in Tegucigalpa had said there would
be an arrest in San Salvador of a specifically named American citizen. According
to the cable, the U.S. citizen was to be arrested:
. . . on narcotics trafficking charges. [The U.S. citizen] will
be arrested today or tomorrow by regional [DEA] agent [Celerino Castillo]
and charged with cocaine trafficking to the U.S. [U.S. Embassy/Tegucigalpa]
alerted [CIA] because [the U.S. citizen] is allegedly some way involved [sic]
with [Max Gomez] and also allegedly has [United Nicaraguan Resistance/FDN
Directorate] contacts and operates his business out of [Hangar 4], supposedly
using [Private Benefactor] pilots and aircraft as part of his drug network.
[The U.S. citizen's] home in San Salvador was raided about one month ago and
guns and a variety of drugs were discovered. [DEA] believes [the U.S. citizen]
will attempt to use publicity of his alleged [U.S. Government] ties to defeat
any prosecution on drug charges. We have no other details on this matter
and are not likely to receive more since regional [DEA representative] operates
from Guatemala City. . . .
- Allegations of Contra drug trafficking at Ilopango--former DEA Special
Agent Celerino Castillo. In his book Powderburns: Cocaine, Contras
& the Drug War (© Celerino Castillo III and Dave Harmon, 1994),
former DEA Special Agent Celerino Castillo alleged that Ilopango was used
by the Contras to support Contra drug trafficking activities. According to
Powderburns, much of Castillo's information relating to alleged Contra
drug trafficking at Ilopango was provided to him by DEA informants, one of
whom reportedly worked at the civil air section of Ilopango air base. In Powderburns,
Castillo referred to this informant at Ilopango as "Hugo Martinez."
- In Powderburns, Castillo said he arrived in Guatemala in October
of 1985 and served until 1990 in the regional DEA office in Guatemala City.
Castillo's responsibilities while assigned to the regional DEA office included
El Salvador. Castillo said that, soon after his arrival in Guatemala City,
his duties brought him into contact with CIA officials both in Guatemala and
in El Salvador. Castillo alleged in Powderburns that, in at least two
instances, he discussed the allegations relating to Contra drug trafficking
with CIA officials.
- The first instance related to a discussion that Castillo said he had with
the San Salvador COS in 1986. As related in Powderburns:
. . . On August 15, I met with Jack McCavett , the mild-mannered
CIA station chief in El Salvador. Again, I repeated my evidence against
the Contras. McCavett denied any connection between the CIA and the Ilopango
operation. As far as [William] Brasher was concerned, McCavett said "He
doesn't work for me. He works for the Contras and Ollie North, and we have
nothing to do with that operation."
Three days later, McCavett called me into his office and pulled $45,000
in cash out of his desk drawer. "I've got money left over from my
budget I need to spend," he said. "Take this for your anti-narcotics
group. Go buy them some cars." McCavett didn't mention the Contras,
but I suspected he was trying to buy me off. The CIA, to my knowledge,
had never given the DEA this kind of gift. I wrote out a receipt and handed
it to him, took the stack of bills, and gave it to Adame and Aparecio.
They bought three much needed vehicles for [an El Salvadoran Police organization].
- In the second instance cited in Powderburns, Castillo claimed he
discussed Contra drug trafficking activities with "Randy Kapasar, a CIA
agent in Guatemala:"
He knew I was investigating the Contras. I knew he was helping
them. I expected him to deny my evidence of the Contras' narcotrafficking
but he followed Sofi's reasoning: "Cele, how do you think the Contras
are gonna make money? They've got to run dope, that's the only way we can
finance this operation."
- Allegations of Contra Drug Trafficking at IlopangoSTG6. CIA
records indicate that, from September 16, 1986 until August 7, 1989, STG6
was an Agency contact who provided information pertaining to drug trafficking
and other subjects. He was turned over to DEA following the termination of
his relationship with CIA on August 7, 1989.
- On at least two occasions, STG6 provided CIA with lead information that
related to possible Contra drug trafficking activities at Ilopango. The first
report of this nature was described in a September 23, 1986 cable to Headquarters.
According to the cable, STG6 provided the names of two Colombians who were
linked to Contra pilot Carlos Amador. Amador, the cable stated, was "suspected
of involvement in narcotics trafficking."
- The second report from STG6 to CIA regarding possible Contra drug trafficking
at Ilopango was described in a March 23, 1988 cable to Headquarters. According
to that cable, STG6 had reported that a Guatemalan citizen and suspected drug
trafficker named Reyner Veliz had recently been traveling with Contra pilot
- CIA Records: A U.S. Citizen. Apart from the U.S. citizen's claims
and an April 8, 1987 cable to Headquarters reporting an unsolicited telephone
call from the U.S. citizen, no information has been found to indicate that
CIA had any relationship with the U.S. citizen. Also, no information has been
found to indicate that the U.S. citizen's activities in El Salvador were related
to the Contras in any manner, other than the October 23, 1986 cable reporting
and a reference to him and the Contras in an April 25, 1986 cable--described
further below--pertaining to the arrest of suspected American mercenaries
- The April 25, 1986 cable --as mentioned earlier--also made a reference
to the U.S. citizen and the Contras. This cable provided an update regarding
the arrest of American citizens suspected of being mercenaries in Brazil.
According to the cable, the detainees had been visited in prison by the U.S.
citizen and another person, "both of whom are apparent friends of several
of the detained mercenaries." Regarding the U.S. citizen, the cable stated
. . . visiting U.S. Consul. . . .who previously served in San
Salvador, told [Consul General] on 25 April he remembers [the U.S. citizen]
as being associated with [CIA] in San Salvador as a military advisor to
Contras operating on the Honduran border with El Salvador.(35)
- In response to the October 23, 1986 cable regarding the U.S. citizen's
pending arrest in El Salvador, an October 25, 1986 Headquarters cable requested
any available information regarding whether ". . . there is any truth
to [the U.S. citizen's] claims of contact" with the United Nicaraguan
Resistance/FDN Directorate as well as "possible operations" conducted
out of Hangar 4 at Ilopango. The Headquarters cable also provided a lengthy
summary of earlier instances in which the U.S. citizen's name had appeared
in CIA records:
- A cable had reported on August 27, 1986 that the U.S. citizen had provided
night vision equipment to the Salvadoran military as part of a contract
that he had with the Salvadoran Government. He reportedly told Salvadoran
and U.S. military officials in El Salvador that CIA had "paid his
salary in the past and made some broad hints as to a current [CIA] relationship."
- A May 14, 1986 cable stated that the U.S. citizen had become a subject
of investigative interest to the U.S. Customs Service's Office of Special
Investigations in New York for allegedly exporting equipment not licensed
for export. The U.S. Customs Service said that it would remove his name
from its watchlist if his activities were connected to the CIA or other
U.S. intelligence organizations. CIA file reviews had found no information
to indicate that the U.S. citizen was connected to CIA and, thus, the
U.S. Customs Service "intended to continue their investigation with
a goal of prosecuting him." Further,
. . . the most recent incident which aroused [U.S. Customs Service]
suspicions occurred on 3 May 1986 when [the U.S. citizen] was supposedly
forced to make an emergency landing in his plane in the general area of
Tamiami, Florida. [He] told fire department officials who responded to his
landing that he was carrying two large cases of top secret material (whether
equipment or documents unclear). He asked the fire department people to
secure the material while he went to the nearest airport to clear customs.
After having gone through a clearance procedure which made no mention of
the "sensitive" material, [the U.S. citizen] returned to the fire
department building, retrieved his two cases, and disappeared. As a result
of this and other incidents, [he] was placed on an [U.S. Customs Service]
watchlist which would ensure a very stringent search of him and his possessions/vehicles
any time he surfaced at an [U.S. Customs Service] office or branch.
- A May 15, 1986 cable reported that, following the May 3 crash, DEA
personnel had asked if CIA had any connection with the U.S. citizen. According
to the summary, DEA had reported that he told firemen responding to the
crash that three Salvadoran passengers traveling with him were being transported
to Fort Bragg, North Carolina "on behalf of [CIA]" The U.S.
citizen, according to DEA, reportedly offered the firemen a $100 bribe
if they "would not report his activity relative to the Salvadorans
to authorities." The cable had also stated that DEA planned a "follow-up
investigation" of the U.S. citizen on suspicion of narcotics trafficking.
- July 1, 1986, cable reported that at a June 27, 1986 meeting with FBI
and Metro Dade Police Department representatives that, when the U.S. citizen
returned to retrieve two suitcases that he had left in the custody of
fire officials following the crash, he was accompanied by a Metro Dade
reserve police officer "who also claimed connection with [CIA] and
vouched for [him]." According to the summary, further inquiry into
the Metro Dade reserve police officer's involvement in the matter had
been delayed by police officials "for fear of interfering with a
[CIA] operation." The cable went on to state that a review of CIA
files at that time had revealed no information concerning the reserve
police officer or the names of the Salvadorans who allegedly were passengers
on the U.S. citizen's airplane.
According to an October 29, 1986 response to the October 25 Headquarters
cable, "preliminary checks" with senior Contra officials regarding
any contacts between the FDN and the U.S. citizen were "negative."
- A March 26, 1987 cable to Headquarters reported that the U.S. citizen and
another individual had been arrested by Dominican Republic authorities upon
landing an airplane in that country. The airplane contained various types
of military-related equipment. According to the cable:
[The U.S. citizen and his companion] also claim to be involved
in military training in Central America and are reluctant to discuss what
they are doing and for whom. Intentional or not, they are leaving the impression
that they are working for [CIA].
- A March 27, 1987 cable to Headquarters reported that the U.S. citizen had
recently sought to sell equipment to the Venezuelan Government and that a
Venezuelan official said that the U.S. citizen "showed him 'State Department
credentials' . . . and [he] claimed that he worked for [a Central American
- A March 27, 1987, cable in response to the March 26, 1987 report summarized
what was known about the U.S. citizen's activities in El Salvador:
[The U.S. citizen] has falsely represented himself on prior occasions
as being associated with [CIA]. He has no relationship with [CIA] but he
was in San Salvador until two or three months ago, trying to sell weapons
and military gear of various kinds to the Salvadoran military. He left El
Salvador in a hurry after a police search of his house here uncovered a
large quantity of various unlicensed, unregistered military arms, including
hand grenades. When last we heard he was under investigation by U.S. Customs
in relation to this incident. He was also under investigation earlier by
DEA for possible narcotics smuggling. He seems to have a history of inventing
supposed contacts with the USG[overnment], particularly [CIA], which he
then uses to pursue his various business interests.
. . . .
- According to an April 8, 1987 cable to Headquarters and several Stations,
a CIA officer serving abroad had received an unsolicited telephone call from
the U.S. citizen. The cable reported that he told the officer during the call
that he had been given the officer's name and telephone number from the commanding
officer of the USMILGROUP. The cable, in noting that the commanding officer
of the USMILGROUP was out of town, said the gist of the U.S. citizen's conversation
with the officer was:
"You don't know me, but I got your name from [commanding
officer, USMILGROUP]. I was just down there and I sell night vision equipment.
[Commanding officer, USMILGROUP] thought it might be a good idea to talk
to you." [The U.S. citizen] said he planned another visit . . . . on/about
24/25 April and wondered if there would be an opportunity to talk with [the
- In a follow-on cable on April 9, 1997 to Headquarters, it was confirmed
that the commanding officer of the USMILGROUP had indeed passed the officer's
name and phone number to the U.S. citizen after telling the COS that "there
was DoD contractor in town selling the . . . military night vision equipment
and wanted to know if the police would have any interest." According
to the cable, the commanding officer of the USMILGROUP did not mention the
name of the contractor, but had passed the officer's name to the U.S. citizen
on the assumption that the COS would concur.
- In an April 10, 1987 cable, Headquarters provided guidance with respect
to contacts with the U.S. citizen:
[Headquarters] appreciates information provided . . . . regarding
telephone conversation with [the U.S. citizen]. As Station is aware, [he]
is notorious for falsely claiming [CIA] affiliation in addition to his involvement
in other nefarious schemes. In light of this fact, Station is urged to politely
but firmly refuse further contact with [the U.S. citizen]. Please advise
any further attempts by [him] to contact other Station/Mission personnel.
- According to an April 13, 1987 cable to Headquarters, :
. . . MILGROUP commander is in contact with [the U.S. citizen]
and presumably will meet with [him] when latter arrives near end of month.
We have no desire to give [him] another window into this mission and we
will follow [the April 10 Headquarters] guidance accordingly, but wonder
. . . whether it would be more in line with an embassy officer to hear him
out and then turn off the contact? . . . .
The cable also asked Headquarters "whether we should have [the U.S.
citizen's] plane carefully searched. We think the Customs Police should
- In its April 16, 1987 response, Headquarters provided explicit instructions:
"Station to avoid contact with [the U.S. citizen]." Further, the
Headquarters cable stated that:
. . . .
[The U.S. citizen] must be considered [a United States] person since he
is evidently a resident and able to freely enter and exit the country. [CIA]
should not become involved in making any decision whether or not to search
his plane. We note that there is no indication in [his] file of any warrant
outstanding against him.
. . . .
- The U.S. citizen's name appears in other Agency cables. However, as stated
earlier, no information has been found to indicate that he or his activities
had any connection to CIA or the Contras.
- CIA Records: Castillo's contacts with CIA officials. CIA records
indicate that in mid-1986, CIA planned an expenditure of $45,000 to purchase
three vehicles for the Government of El Salvador. The money was accounted
for in CIA records on August 18, 1986, the same date Castillo alleged in Powderburns
that he received $45,000 from a person he refers to as COS McCavett. Although
no information has been found to indicate the process by which the vehicles
were purchased and given over to the Salvadorans, no information has been
found to indicate that the transaction involved Castillo or DEA in any manner.
- CIA Records: Contacts with STG6. STG6 became a CIA contact in late
1986. CIA records indicate that DEA had an ongoing operational interest in
STG6. According to a November 18, 1987 cable to Headquarters, a regional DEA
office had indicated that this particular individual was a "source of
information regarding illegal aircraft movements/narcotics trafficking"
at Ilopango air base.
- A January 18, 1988, cable to Headquarters noted that the DEA representative
had said that the DEA regional chief had been briefed regarding STG6 prior
to DEA expressing interest in him:
STG6 has access to valuable and unique information by virtue
of his job and [he] said that [DEA] needs this data regarding movement of
aircraft in the region. Station wished to pass this view so that appropriate
STG6 information can be passed to [DEA] for action.
- Information provided by STG6, on occasion, was transmitted with a request
that the information be passed to the regional DEA office or shared directly
with a representative from the regional DEA office during meetings with CIA
personnel. Of these reports, only one had any apparent Contra connection:
- A March 23, 1988 cable indicating that Guatemalan citizen and suspected
drug trafficker Reyner Veliz was traveling with Contra pilot Marcos Aguado.
Included in this cable was a request that this information be passed to
the regional DEA office with the following caveat: "Please omit specific
locations of travel and location of source [i.e., STG6]"."
- According to a July 31, 1989 cable to Headquarters, CIA officers met with
a representative from the DEA's regional office in Guatemala City on July
24-28, 1989. As a result of that meeting, an offer was made to the DEA representative
to turnover STG6 to DEA.
- According to an August 1, 1989 cable, DEA "definitely agrees to take
over STG6." Headquarters approved the turnover of him in an August 2,
- Individual Statements: CIA personnel. A CIA officer who was closely
aware of events at Ilopango during the 1981-1983 time frame and from May 1984
until May 1986 recalls that, until the 1984 congressional cutoff of funds,
he had frequent contacts with Contra pilots. After the cutoff, these contacts
diminished, although certain authorized contacts were permitted to continue.
- The officer says he has no knowledge of drug trafficking at Ilopango. He
comments that he frequently observed and--prior to the 1984 funding cutoff--sometimes
assisted with the loading of supplies onto Contra aircraft at Ilopango. He
is very doubtful that illicit drugs could have been placed on board Contra
aircraft during the times he was present. Moreover, he notes that the aircraft
he observed being loaded with supplies were destined, not for the United States,
but for Contras operating in Central America. Following the 1984 funding cutoff,
he says he continued to observe and monitor the activities of Contra aircraft.
- According to the officer, the Salvadoran Air Force provided the Contra
pilots with identification cards that allowed the pilots to bypass Salvadoran
customs upon landing at Ilopango and also allowed them unrestricted access
to the air base. He says the commanding officer of Ilopango, General Juan
Bustillo, was a staunch supporter of the Contras and, because of this support,
he authorized the pilots to be issued the identification cards to facilitate
such access. The CIA, according to the officer, had nothing to do with the
issuance or control of these identification cards.
- The officer says Contra pilots sometimes parked their aircraft at a location
some distance away and in an area of the military side of Ilopango that was
not easily observable from the base control tower or from the nearby civilian
side of the airfield. Particularly after the 1984 funding cutoff, Contra planes
could easily come and go from Ilopango without CIA knowledge, he says.
- A helicopter pilot who worked for a CIA contractor at Ilopango from 1984
until 1986 says he was instructed by CIA to keep Contra personnel at arms
length following the 1984 funding cutoff. He says he has no knowledge of Contras
using Ilopango for drug trafficking.
- A senior CIA officer who was aware of CIA activities at Ilopango does not
recall learning of any specific allegation relating to Contra use of Ilopango
to support any drug trafficking activities. He does, however, recall that
there were unsubstantiated drug-related allegations against Contra pilot Marcos
- Another senior officer recalls that he asked the officer who was closely
aware of events at Ilopango to look into allegations of drug trafficking by
the Contras or others and that the officer was never able to confirm any of
- A third senior officer who had some awareness of activities at Ilopango
says he has no knowledge of Ilopango being used by the Contras for drug trafficking.
- Another officer who possibly would have been aware of activities at Ilopango
says he knows of no Contra drug trafficking activity at Ilopango and opines
that the Salvadoran Ilopango base commander, General Bustillo, would not have
tolerated such activity.
- Another retired CIA officer who frequently visited Ilopango says that he
has no recollection of Contras coming through Ilopango during his tour in
Ilopango. "I can be definite that [the Contras] never came to my attention,"
- An officer who says he met former DEA Special Agent Celerino Castillo in
Guatemala and, on one occasion, worked with him and others on a project unrelated
to the Contras, recalls Castillo discussing suspected narcotics trafficking
at Ilopango, but recalls that Castillo made no specific reference to possible
Contra involvement in those activities. Contrary to Castillo's claims, this
officer emphatically denies that he had any knowledge of Contra drug trafficking
activities at Ilopango or elsewhere. He also denies that he made any statement
to Castillo relating to such knowledge. He also denies that he ever asked
Castillo to back away from any narcotics investigation.
- Felix Rodriguez retired from CIA in 1976. He was an advisor to the Salvadoran
military in a private capacity at Ilopango from February 1985 until the late
1980s.(36) Rodriguez also assisted
the Private Benefactors at Ilopango in providing aid to the Contras. Rodriguez
states that he has no knowledge of any alleged Contra drug trafficking activities
being conducted from Ilopango or elsewhere. Rodriguez also says he personally
knew the U.S. citizen in El Salvador, that he dealt with the Salvadoran military
as a salesman of various military related equipment and that he had no apparent
links to the Contras. Rodriguez denies having any knowledge of any alleged
drug trafficking by the U.S. citizen, but says he understands that he was
banned from making further sales to the Salvadoran military when Salvadoran
officials determined that he was allegedly charging the Salvadoran military
exorbitant prices for military equipment.
- Individual Statements: DEA Personnel. A DEA intelligence analyst
recalls that he participated in DEA's review of Castillo's allegations regarding
drug trafficking activities at Ilopango. The analyst also states that he participated
in DEA's coordination of the January 21, 1987 Memorandum from Acting DCI Robert
Gates regarding allegations of Contra drug trafficking that was requested
by Assistant Secretary of State for INR Morton Abramowitz. He recalls that
DEA found no information to support Castillo's allegations linking the Contras
to drug trafficking. "It was [DEA's] experience that all of the Contra
allegations lacked substance . . . ," he asserts.
- Individual Statements: A U.S. Citizen. The U.S. citizen denies any
involvement in smuggling weapons or drugs. He says he never worked for CIA
and was never recruited to work for CIA. He also says his only connection
with the Contras was that he once met "one Contra pilot" briefly.
He says he does not recall the pilot's name or the particular circumstance
of the meeting. The U.S. citizen claims that Salvadoran authorities allowed
him to utilize Hanger 3--not Hangars 4 or 5--at Ilopango to install equipment
in Salvadoran military helicopters. According to the U.S. citizen, CIA controlled
Hangars 4 and 5 and he never entered those hangars.
- Information Sharing with Other U.S. Government Entities. In addition
to the instances described earlier wherein information relating to alleged
drug trafficking at Ilopango was shared with DEA, allegations that Ilopango
air base may have been used by the Contras for drug trafficking were discussed
in the January 21, 1987 Memorandum from Gates to Abramowitz concerning alleged
Contra drug trafficking connections that was coordinated with other Intelligence
Community agencies and DEA prior to its dissemination. According to the Memorandum:
In March 1986, DEA/Guatemala began receiving reports of suspicious
activities at Ilopango Airfield in San Salvador, El Salvador. According
to . . . DEA [information], a hangar at the airfield was being used by traffickers
to store cocaine en route to the U.S. The hangar reportedly was being used
in transporting arms to the Contras. DEA/Guatemala investigated these reports
and decided there was insufficient evidence to warrant pursuing a drug investigation.
DEA did, however, inform the U.S. Customs Service of other information discovered
in the course of the investigation that related to possible weapons smuggling
- In a January 21, 1987 letter to Abramowitz that accompanied the Memorandum
regarding alleged Contra drug connections, ADCI Gates discussed DEA plans
regarding allegations of drug-related activity at Ilopango:
We are told that DEA Headquarters plans to follow up on the matter
of the adequacy of DEA/Guatemala's investigation of alleged drug trafficking
at Ilopango Airfield in El Salvador . . . . DEA will report additional information
as it becomes available. The Intelligence Community has no information independent
of DEA regarding this matter.
- A March 31, 1988 Office of Congressional Affairs Memorandum for the Record
indicates that SSCI Staff Director Sven Holmes was provided a copy of the
Gates-Abramowitz Memorandum on March 29, 1988.
To what extent did CIA disseminate "finished intelligence products"
that included information about drug trafficking on the part of individuals,
organizations, and independent contractors associated with the Contras?(37)
- The Analytic Environment. Agency analysts who were responsible for
counternarcotics issues during the 1980s indicate that three factors accounted
for the small number of finished intelligence products during the 1980s that
related at all to the Contras and narcotics trafficking. First, Central America
in general was not a high priority counternarcotics target for the Agency
before 1986. This reflected primarily the focus of U.S. Government policymakers
on Latin American drug suppliers, in particular the Medellin Cartel in Colombia.
According to a CIA officer, who was Assistant National Intelligence Officer
(NIO) for Narcotics from 1984 to 1986 and Chief of a division in the DI's
Office of Global Issues (OGI) dealing with international narcotics from 1986
to 1989, the counternarcotics effort was "consumed" with the Medellin
Cartel because it was the main actor in the cocaine trade. The Agency concentrated
on targets, such as the Cartel, as to which DEA had operations underway or
in the planning stages that intelligence could support.
- The CIA officer recalls that Central America was on the screen occasionally
because the Colombian cartels were setting up alternative transit routes there--particularly
in Guatemala and Nicaragua--in an effort to circumvent the U.S. interdiction
effort. Even so, the region was "just a blip on the scope" for the
most part. This CIA officer and several other Agency analysts note that, with
respect to Nicaragua, the U.S. policy focus was on the Sandinista Government's
involvement in narcotics trafficking--not on that of the Contras. The policymakers,
one analyst asserts, really wanted to "get" the Sandinistas on this
- The second factor, which was a consequence of U.S. policymaker priorities,
was that the DO assigned a low priority to collecting intelligence concerning
the Contras alleged involvement in narcotics trafficking. As a result, Agency
analysts had only a small number of reports on which to base their analysis.
According to CIA records, only three DO reports regarding Contra drug trafficking
were found to have been disseminated between October and December 1984. These
were the reports describing the alleged agreement between Pastora's associates
and a Miami-based drug trafficker involving material support for the Contras
in return for the trafficker's access to the Southern Front's pilots and landing
- Furthermore, the reports were disseminated as "Sensitive Memorandums,"
a format that required strict access control. The internal dissemination lists
for the reports indicate that all three were shared with the Directorate of
Intelligence's (DI's) Office of African and Latin American Analysis and with
the National Intelligence Officer (NIO) for Latin America. The NIO for Narcotics
received two of the three reports. However, the Office of Global Issues (OGI),
which was responsible for counternarcotics analysis in the DI, did not receive
copies of the reports. Further, the strict access controls made it difficult
for analysts to incorporate information from the reports into finished intelligence
products that would have a broader dissemination.
- The analyst who drafted a Memorandum for Vice President Bush in April 1986
that related to potential Contras' involvement in drug trafficking recalls
that OGI analysts who worked on counternarcotics issues were not aware of
those reports at the time--October to December 1984--that they were first
disseminated inside and outside the Agency. However, she says that CATF Chief
Fiers did make the reporting available to her in April 1986, stipulating that
it could be used only for the Memorandum she was preparing for Vice President
- A CIA officer, who was a Division Chief in ALA from 1984 to 1986, says
that he does not recall any significant reporting in autumn 1984 with respect
to the alleged agreement between Pastora's associates and Miami drug trafficker
Morales. Nor does he recall any credible narcotics reporting during his tenure
that would have merited treatment in a finished intelligence product.
- The Assistant NIO and the then-NIO for Latin America say that the DI was
largely unaware of the totality of DO reporting on the issue of Contras and
narcotics trafficking. The former of the two officers notes that there was
a sharp divide in those days between the DO and DI narcotics analysis and
there was not a "free flow of information." He states that, although
the DO would cooperate in providing information for certain high priority
tasking such as the January 21, 1987 Memorandum from ADCI Gates to Assistant
Secretary of State Abramowitz, the DO had to be pulled along on the counternarcotics
effort for the most part. The former of the two officers adds that the DO
became very engaged in Latin America after April 1986.
- The then-NIO for Latin America says that ALA's Division and the DO's LA
Division had an agreement that the ALA analysts could review relevant operational
cables. LA Division, however, determined what was relevant, and "so-called
administrative traffic" involving DO assets was off limits. Further,
he states that the DI and National Intelligence Council did not believe that
the Contras were an effective insurgent force, thus causing problems for CATF.
Consequently, he says, he always felt that Fiers was not showing the analysts
any reporting that would cause problems for the Contra program. He cannot
document what reporting might have been withheld from him "because .
. . you don't know what you're not seeing."
- The former ALA Division Chief says that the relationship between his DI
division and CATF was fairly collaborative even though Fiers would not be
at the top of his list of good collaborators. He asserts that Fiers "played
a lot of things close to his vest" as he should have. However, everything
of substance was fully discussed among Assistant Secretary of State Elliott
Abrams, Fiers and the NIO/Latin America. He recalls discussions of Contra
stealing, smuggling and other wrongdoing, but no discussion of narcotics trafficking.
Narcotics was not one of the topics of concern at the time.
- An officer, who served as LA Division Chief of Reports from 1979 to mid-1984
and then served as the ALA Division Chief's deputy in the DI until 1986, says
that she is not aware that anyone associated with the Agency suppressed reporting
concerning drug trafficking by the Contras. She avers that she would have
been "in Fiers' face" were he to "fool with the information
to make [CIA] look good." Concerning the lack of finished intelligence
concerning the Contras and drug trafficking, she states that the issue would
not become apparent without DO reporting, and the analysts would keep whatever
information became available in a file until there was a reason to do something
- The third factor explaining why very little finished intelligence was produced
by the DI regarding Contra drug trafficking was that Agency analysts had limited
access to reporting from federal law enforcement agencies at the time. The
former ALA Division Deputy Chief points out that DEA, not the DO, was the
primary collector of narcotics trafficking information in the early 1980s.
Along these lines, one DI analyst recalls that DEA was even reluctant to provide
this reporting, probably because it pertained to ongoing investigations.(38)
A senior DI officer recalls that CIA analysts had routine access to strategic
and tactical DEA intelligence reporting, but not to law enforcement investigative
and operational information.
- CIA only disseminated three finished intelligence products during the 1980s
that related at all to potential Contra involvement in narcotics trafficking.
These were: (i) a 1985 National Intelligence Estimate (NIE) concerning the
international narcotics trade; (ii) an April 1986 Memorandum for Vice President
George Bush; and (iii) the January 1987 Memorandum from Acting DCI Robert
Gates to Assistant Secretary of State for Intelligence and Research Morton
- 1985 National Intelligence Estimate. National Intelligence Estimate
(NIE) 1/8-85, "The International Narcotics Trade: Implications for US
Security," was published in November 1985. One paragraph dealt with trends
in the "narcotics industry" and noted that the "continued expansion
of trafficking routes through Central America" was of "particular
concern because of the number of antigovernment insurgent groups active there."
The paragraph went on to note:
We have no confirmed reports that link Central American insurgent
groups with drug trafficking, but we cannot rule out the possibility that
individual contacts have already occurred.
The estimate made no explicit reference to the Contras or any other specific
insurgent group in Central America.
- A senior DI officer says that the Contras were not dealt with in the NIE
because the focus of the estimate was on the "bad guys"--individuals,
groups, and governments, such as the Sandinistas, that were hostile to U.S.
interests. The Contras, he states, were regarded as friends and were outside
the scope of the Estimate. There was never any discussion about including
them; "it just never came up." The then-NIO does not recall any
discussion among Intelligence Community analysts who participated in the production
of the NIE concerning the acquisition of more intelligence reporting concerning
insurgent groups and their ties to narcotics traffickers.
- 1986 Memorandum for Vice President Bush. On April 6, 1986, a Memorandum
entitled "Contra Involvement in Drug Trafficking" was prepared by
CIA at the request of Vice President Bush. The Memorandum provided a summary
of information that had been received in late 1984 regarding the alleged agreement
between Southern Front Contra leader Eden Pastora's associates and Miami-based
drug trafficker Jorge Morales. Morales reportedly had offered financial and
aircraft support for the Contras in exchange for FRS pilots to "transship"
Colombian cocaine to the United States. CIA disseminated this memorandum only
to the Vice President.
- The DI/OGI analyst who drafted the Memorandum says that there was no follow-up.
Furthermore, the analyst recalls no further DI discussion of the Contras'
alleged involvement in drug trafficking until the Memorandum that was written
for Assistant Secretary of State Abramowitz in 1987.
- 1987 Memorandum for Abramowitz. The most comprehensive discussion
of alleged Contra narcotics trafficking was included in a January 21, 1987
Memorandum from Acting DCI Robert Gates to DoS Assistant Secretary for Intelligence
and Research Morton Abramowitz. The genesis of this Memorandum, entitled "Assessment
of Alleged Connections Between Drug Traffickers and Anti-Sandinista ('Contra')
Groups," was a January 9, 1987 memorandum from Abramowitz to then-Deputy
Director of Central Intelligence Gates indicating that Assistant Secretary
of State Elliott Abrams had expressed concern about the possible involvement
of Contras in narcotics trafficking and had requested an Intelligence Community
study "on an urgent basis." The memorandum from Abramowitz indicated
that Abrams wanted the study "to pull together all foreign and domestically-generated
information that is available, rumors and all, and provide an assessment of
the credibility of the charges." Further, the memorandum to Gates indicated:
The Assistant Secretary believes that it is essential that we
know before the rest of the world if any of those whom we have funded are
engaged in this business so that they can be expelled from the ranks of
- The Memorandum to Abramowitz was written under the auspices of the NIO/Narcotics
and was drafted jointly by officers from the DO and the DI's Office of African
and Latin American Analysis. In addition to DO reporting, the assessment relied
heavily on DEA information. Six topics were addressed, including:
- Allegations discussed in three disseminated DO reports of October,
November and December, 1984 concerning Pastora, Adolfo Chamorro, Gerardo
Duran, David Mayorga, and Jorge Morales;
- Statements to FBI and DEA undercover agents by Orlando Bolanos, who
claimed to be in command of an anti-communist movement in Nicaragua called
the " Internal Front," that he planned to smuggle cocaine into
the United States;
- The Frogman Case, which involved Nicaraguan drug traffickers who had
been apprehended in early 1983 while swimming ashore near San Francisco,
including information indicating that an unnamed suspected drug trafficker
had placed 51 calls to a telephone in the FDN office in San Francisco
that was later learned to have been listed to one of the defendants in
the case. The defendant's name was not given;
- "Suspicious activities" at Ilopango air base in El Salvador;
- An allegation that Roger Herman, political director for the Contra
group, KISAN, was involved in cocaine smuggling into the United States;
- Allegations that the ranches of "two [unnamed] U.S. nationals"
in Costa Rica, were used to smuggle weapons to the Contras and cocaine
into the United States.
- The Memorandum prepared for Abramowitz concluded that there was "no
indication that anti-Sandinista groups that have received or now are receiving
support from the U.S. Government have engaged in drug trafficking to fund
their operations." Moreover, according to the Memorandum, DEA and FBI
officials, along with Intelligence Community leaders, said that "no credible
information exists to support" allegations of Contra involvement in drug
trafficking that "have surfaced over the past four years, particularly
when renewed funding for the Nicaraguan insurgency was under consideration
in the U.S. Congress."
- The Memorandum also concluded that, if Contra organizations had unwittingly
received donations from sympathizers who derived the funds from drug trafficking:
. . . our best judgment is that the donations probably reflected personal
decisions on the part of the donor rather than an organizational effort
on the part of an anti-Sandinista group.
Further, the Memorandum stated that "we have no information suggesting
Pastora's personal involvement" in the alleged agreement between his
associates and Miami drug trafficker Morales, but "he may have been
aware of them given his apparently close association with these individuals."
- A January 21, 1987 transmittal letter that ADCI Gates attached to the Memorandum
when it was sent to Abramowitz indicated that the Memorandum was being released
with two qualifications:
- DEA Headquarters planned to follow up on the matter of the adequacy
of a DEA investigation of alleged drug trafficking at Ilopango.
- The U.S. Customs Service was investigating allegations by Mario Calero
that crew members working for Southern Air Transport might have been involved
in drug trafficking.
The transmittal letter concluded with the observation that:
. . . as future drug trafficking cases surface it is likely that
we will see more assertions of Contra connections. Such assertions may take
the form of self-serving stories by traffickers for use in their legal defenses
as well as allegations by the Sandinistas to discredit the insurgents.
- According to a senior DI officer, Gates made it clear in commissioning
the Memorandum that the issue raised by Abrams and Abramowitz must be addressed
"head on and let the chips fall where they may." This officer recalls
that the core judgment of the analysts involved in producing the Memorandum
was that only a handful of Contras might have been involved in drug trafficking.
No one believed, he recalls, that there was a major conspiracy or drug trafficking
network at play. Concerning the Ilopango issues, the senior DI officer states
that DEA had sent a DEA officer to El Salvador to investigate and the officer
had concluded there was no substance to the allegations.
- A March 31 1988 MFR by OCA Director John Helgerson indicated that SSCI
Staff Director Sven Holmes had been provided a copy of the January 21, 1987
Memorandum that had been prepared for Assistant Secretary of State Morton
To what extent did CIA share information with Congress regarding
allegations of drug trafficking on the part of individuals, organizations,
and independent contractors associated with the Contras? (39)
- CIA records indicate that CIA notification to Congress regarding allegations
of drug trafficking occurred primarily in response to congressional inquiries
until 1984 and did not focus on the Contras specifically. For example, on
July 14, 1982, DDCI John McMahon testified before the SSCI concerning the
issue of "United States Government Current and Projected Efforts on International
Illicit Drug Trafficking." The questions posed to McMahon at that time
by the SSCI Staff related to the overall Intelligence Community strategy and
reporting responsibilities concerning the narcotics issue. The relevant portions
of the SSCI transcript of this hearing contained no explicit references to
any connection between the Contras and drug trafficking.
- DO "Nicaraguan Program Summary" Information. As mentioned
earlier, three intelligence reports were disseminated by the DO to senior
officials in the intelligence and law enforcement agencies between October
and December 1984. These reports indicated that senior Southern Front leaders
associated with Eden Pastora had concluded a mutual assistance agreement with
Miami-based drug trafficker Jorge Morales. During the fall of 1984, the information
provided was also reported in a CIA publication titled the "Nicaraguan
Program Summary," a weekly report that was provided to the SSCI at its
request. The weekly publication emphasized military activities, but also reported
information about "funding, arms and other materiel assistance obtained
by the Contras from (or promised by) third governments and private sources."
- The information first appeared in the DO "Nicaraguan Program Summary
- Week Ending 21 October 1984," dated October 24, 1984. This edition
included a special entry entitled "Private Support" that stated:
Adolpho [sic] Chamorro and Marco Antonio Aguado said that
the FRS had obtained in early October 1984 two helicopters and one fixed wing
aircraft. This support was reportedly the result of Chamorro's and Aguado's
recent trip to Miami to secure funds and material support for the FRS.
- Another DO "Nicaraguan Program Summary - 14-28 October 1984,"
dated October 28, 1984, provided additional information to the SSCI:
Unconfirmed reports have been received which tie Pastora and several
command-level members of his organization with [sic] drug smuggling
operations in the United States. According to these reports, the FRS reached
an agreement with an unidentified Cuban narcotics trafficker in Miami to
provide operational facilities in Costa Rica and Nicaragua plus assistance
with Costa Rican Government officials in obtaining documentation. In exchange,
the FRS would receive financial support, aircraft, and pilot training. We
have relayed this information to appropriate law enforcement agencies and
will apprise the Oversight Committees of additional developments.
- The DO "Nicaraguan Program Summary - Week Ending November 11, 1984,"
dated November 11, 1984, provided still additional detail:
In late October 1984, negotiations were allegedly completed whereby
a Colombian narcotics trafficker would support the FRS with funds and aircraft
in exchange for the use of FRS pilots in the drug trafficker's narcotics
activities. Under the terms of the agreement, the FRS would provide an unspecified
number of pilots for use in narcotics transportation in exchange for the
loan of a Cessna 404 aircraft for use in FRS military operations in Costa
Rica and El Salvador as well as monthly payments of U.S. $200,000. Information
at this time suggests that this drug operation is part of the activity previously
described in the last Nicaragua Program Summary. We are in the process of
acquiring additional details and are coordinating future actions with the
Department of Justice.
- Other Information Sharing with Congress. On January 29, 1985, the
Agency forwarded to Steven Berry, HPSCI Associate Counsel, a response to a
question he had raised regarding Pastora's possible consummation of a working
arrangement with Colombian drug dealers. The Agency response noted that "all
relevant details have been reported in the Nicaraguan Program Summary."
The response added that:
To summarize . . . intelligence reporting indicates that members
of Pastora's organization (FRS) have agreed--either with Pastora's direct
knowledge or tacit approval--to provide pilots and landing strips inside
Costa Rica and Nicaragua to a Miami-based Colombian drug dealer in exchange
for financial and material support. Information pertaining to Pastora's
involvement in drug trafficking has been forwarded to the appropriate Enforcement
- On January 6, 1986, the SSCI requested Agency comments concerning a December
27, 1985, Washington Post article entitled "Nicaragua Rebels Linked
to Drug Trafficking." A similar request was levied the next day by HPSCI
Staff Director Tom Latimer. CIA's reply to both Committees was provided on
January 22, 1986 in a letter signed by ADCI McMahon. The letter described
the Agency's knowledge of Adolfo Chamorro's involvement with Morales, provided
information about other contacts Chamorro had with suspected drug traffickers
and offered a briefing concerning Chamorro's activities. In addition, the
letter mentioned Gerardo Duran's arrest in Costa Rica and Duran's connection
- According to a May 7, 1986 MFR prepared by Louis Dupart of CATF, CIA representatives
met with Richard Messick, Chief Counsel of the Senate Foreign Relations Committee
(SFRC), on May 7, 1986. Messick reportedly called the meeting to "permit
members of Senator [John] Kerry's staff to outline in greater detail information
which they had uncovered that pointed to violations of U.S. law"--primarily
related to the activities of John Hull. According to this MFR, William Perry
of the SFRC staff, Charles Andreae of Senator Richard Lugar's staff, and Ronald
Rosenblith, Jonathan Winer and Dick McCall from Senator Kerry's staff represented
the Congress. CIA was represented by John Rizzo, OCA Legislative Affairs Chief;
George Jameson, Counsel to the DDO; and Louis Dupart, CATF Policy and Plans
Chief. DoS was represented by William Walker, Deputy Assistant Secretary of
State for Inter-American Affairs; Ambassador Duemling, Director/NHAO; and
a representative from the DoS Office of the Legal Advisor. Representatives
from Justice, FBI, and DEA also attended. The Dupart MFR concluded that:
. . . Overall, the meeting was not fruitful. Kerry's Staffers
were unwilling to provide details or identify their sources. Without this
information it was impossible to meaningfully rebut the allegations that
have been made of violations of U.S. law.
- According to a May 8, 1986 MFR written by a CATF officer, she, Rizzo, Dupart,
and David Pearline, met with SFRC Chief Counsel Messick again that day to
continue discussions about Senator Kerry's investigation:
Messick feels that Kerry's staff sandbagged him by not providing
all of the relevant correspondence. He noted that he had received a letter
written by the U.S. Attorney in San Francisco that refuted the [drug] charges
that members of the [Contras] had been involved in drug smuggling.
The MFR also noted discussions in this meeting regarding the nature of
the information that American journalists Tony Avirgan and Martha Honey
had to support their allegations of murder, attempted murder and drug smuggling
and the relationship of their witnesses to the Kerry investigation. According
to the MFR, Messick said that:
[Senator] Kerry called Senator Lugar on 7 May . . . to request
a five day hearing on his allegations . . . . Lugar was apparently not sympathetic
and told Kerry that he will have time to air his information but will not
have five days of hearings on his allegations alone. Messick said the hearing
will be in early June and will probably be two morning sessions.
- Additionally, the May 8, 1986 MFR stated that Messick was told that the
FBI had "extensive information on the people who had been interviewed
by Kerry's staff . . . . " Dupart reportedly told Messick that "[Dupart]
could not discuss in detail the information provided by the Bureau" and
that Messick "would have to go to the Bureau for the details." The
MFR stated that the meeting lasted one hour and a half and "at the end
it was agreed that we would keep in touch."
- An August 1, 1986 MFR from Dupart to CATF Chief Fiers and the LA Division
Chief recorded a July 9, 1986 meeting with HPSCI Staff member Mike O'Neil
on John Hull. According to the MFR, the meeting was held in CATF Chief Fiers'
office. Dupart wrote in his MFR that Fiers noted that:
We have no information of Hull having been involved in violations
of U.S. law. Further, since we are not a law enforcement agency, we have
not collected or sought any information on this. Consequently, while it
is possible that Hull had in fact violated the law, we have no knowledge
of any violations. We would have reported them to the Department of Justice
per standard Agency procedures.
The MFR further stated that, in response to other questions from O'Neil,
Fiers said that Pastora had voluntarily renounced his role as a resistance
- A March 5, 1987 MFR written by OCA's Robert Buckman indicated that Fiers
and the ALA Deputy Director briefed SSCI members and staff concerning
Nicaragua that same day. The MFR noted that those attending the briefing had
been informed that "the BOS risked losing its U.S. aid if it did not
fully sever its ties with Adolfo "Popo" Chamorro" because of
his possible involvement in drug dealing.
- An April 30, 1987 CATF MFR indicated that CATF Chief Fiers briefed the
SSCI concerning the Nicaraguan program on the same date. According to the
MFR, Fiers explained the allegations regarding Southern Front involvement
with drug trafficking dating back to late 1984. Fiers stated that, on learning
of the arrangement that was made between Jorge Morales and senior ARDE leaders,
CIA had "turned [the matter] over [to] DEA." The MFR also stated
that Fiers had added that Octaviano Cesar--brother of BOS leader Alfredo Cesar--had
a close relationship with Morales and that Cesar was questioned when this
connection became known and Cesar's answers caused CIA to conclude that Cesar
was probably involved in drug trafficking. Further, Fiers told the SSCI that
the DO had learned that one of its air crew subcontractors was under indictment
in Detroit and that CIA was now asking the FBI and DEA to run traces on all
subcontractors involved in the Contra program.
- CIA received a letter from Representative Charles B. Rangel, Chairman of
the U.S. House of Representatives Select Committee on Narcotics Abuse and
Control, dated May 14, 1987, requesting information concerning Contra drug
trafficking as a result of media allegations. A May 28, 1987 response by the
CIA Director of Congressional Affairs, David Gries, denied "any allegation
that the Agency was involved in drug trafficking in support of the Contras."
- A July 15, 1987 memorandum from OCA Officer Robert Buckman to OCA Director
Gries, stated that convicted narcotics trafficker Jorge Morales had testified
that same day before the SFRC Subcommittee on Terrorism, Narcotics, and International
Operations regarding Contra drug trafficking and gun running. The memorandum
stated that Morales had implicated the Agency in drug trafficking, but the
memorandum did not describe any specific allegations by Morales.
- After Morales' appearance before the SFRC Subcommittee on Terrorism,
Narcotics and International Operations, Fiers was called to testify before
the SSCI on July 31, 1987. According to the SSCI transcript of that testimony,
Fiers summarized CIA information concerning possible Contra involvement in
drug trafficking. In his opening remarks, Fiers stated:
What we have found to date is that none of the people currently involved
in the resistance leadership, armed or political, have any--we have uncovered
no indications that any of these individuals are involved or have been
involved in narcotics trafficking.
Fiers noted, however, that there was one resistance leader--unnamed by
Fiers--who might be involved in trafficking and that he was under "active
- Fiers added in his testimony that:
We have a significant body of evidence with regard to involvement
of the former members of ARDE in the Southern Front--Pastora's people--being
directly involved in cocaine trafficking to the United States and as part
of an effort to maintain and fund their organization during the period of
cutoff after May of 1984.
Conversely, we have never found any evidence indicating that the FDN
or those around the Northern Front, as it is known today, have been involved
in cocaine or any drug dealings, and we have looked very closely at that
. . . .
I believe personally, based on the evidence that I have seen, that there
is a basis in fact for the claims that Jorge Morales has made in his testimony
and in his public statements, that he was involved with members of ARDE
in cocaine smuggling.
We first began to develop information on that involvement in October
of 1984. There were some vague indicators of problems prior to that in
the 1983 time frame, but nothing specific.
Also during his July 31, 1987 SSCI testimony, Fiers described what was
known to CIA about narcotics allegations concerning the unnamed resistance
leader and Contra-related personnel Marcos Aguado, Octaviano Cesar, David
Mayorga, Adolfo and Roberto Chamorro, and Gerardo Duran.
- An August 3, 1987 OCA MFR by Buckman recorded a meeting of SSCI and OCA
officers that day. Attending for the SSCI were Staff Director Sven Holmes,
Jim Dykstra, Dave Holliday, Keith Hall, and Britt Snider. David Gries, Al
Dorn, and Robert Buckman represented OCA. According to the MFR, Holmes questioned
CIA's use of [name deleted] in the Contra supply program in light of allegations
of drug-related activities by [this person]. The MFR indicated that Fiers
was contacted by telephone during the meeting and reportedly stated that Agency
policy was that persons such as [this person] could be used in the Contra
program if there were no ongoing investigations of wrongdoing or no outstanding
- An October 14, 1987 OCA MFR indicated that in a briefing to the
SSCI Staff on that same day, Fiers provided SSCI Staff members additional
information about a Contra leader who might be involved in drug trafficking
and to whom Fiers had referred in his July 31 testimony. He told Staff members
that regarding the Contra leader--Jose Davila--as a result of questioning
by CIA Security, there were major concerns regarding narcotics-related issues.
- A December 22, 1987 letter from DCI Webster to Senator Kerry of the SFRC
stated that Webster:
. . . welcomed the opportunity to meet with you and discuss your
concerns about John Hull and your request for assistance in the Subcommittee's
narcotics investigation. This is the kind of open and unencumbered exchange
that I believe we must have between the Agency and Congress.
The Webster letter also stated that:
Concerning John Hull, I can assure you that he is not receiving
any support from the Agency, and we have no reason to believe that any other
element of the United States Government is supplying such support. As you
will recall, you were briefed on John Hull on 15 October 1986 following
the Hasenfus crash. My staff is prepared to provide you with an update if
The Webster letter also stated that Webster wanted to assure Senator Kerry
"once again that you will enjoy this Agency's fullest possible cooperation
during the course of the Subcommittee's investigation."
- John Helgerson, Director of the Office of Congressional Affairs from January
1988 to March 1989, says that CIA attempted to comply with requests for information
from committees of Congress--such as the SFRC--other than the intelligence
oversight committees by coordinating the requests and Agency responses. He
We in OCA worked over an extended period of time with the SSCI
staff to identify what they thought to be information appropriate to the
needs of the non-intelligence committees. To the extent of my knowledge,
we provided that without reservation [and] considered that "full disclosure"
as it fully met the requests of those committees legitimately engaged in
the oversight of the CIA.
- A January 4, 1988 OCA MFR by Buckman indicated that CATF provided a summary
briefing for SSCI concerning the Nicaraguan program on the same date. At the
briefing, Senator Bill Bradley inquired about allegations of drug trafficking,
and Fiers responded that "Pastora had been involved with Colombian trafficking
but that the FDN was clean."
- A February 2, 1988 OCA MFR, regarding a January 27, 1988 meeting, indicated
that Senator Pete Wilson of California was briefed by CATF regarding allegations
of human rights abuses and drug trafficking by the Contras. According to the
OCA MFR, Senator Wilson was informed by a CATF officer that:
. . . we look into the allegations periodically and are assured
that there is no drug running going on among groups the US supports. We
have had some evidence that two people close to Pastora were implicated
in drug trafficking in 1984.
- A March 31, 1988 MFR by OCA Director John Helgerson indicated that SSCI
Staff Director Sven Holmes had been provided a copy of the January 21, 1987
memorandum that had been sent by ADCI Robert Gates to Assistant Secretary
of State Morton Abramowitz. The memorandum, entitled "Assessment of Alleged
Connections Between Drug Traffickers and Anti-Sandinista ('Contra') Groups,"
was reportedly coordinated through the Intelligence Community and DEA and
contained an assessment of alleged Contra-related narcotics trafficking. It
concluded that "no credible information exists to support" allegations
of Contra involvement in drug trafficking that had been made over the previous
- A February 23, 1988 OCA MFR documented one of a series of weekly meetings
between OCA representatives and SSCI Staff members. These meetings resulted
from a request for information by Senators Kerry and Pell of the SFRC, via
the SSCI, for documents relating to the Contras and drug trafficking. The
A meeting has been held between Senator Kerry with [sic]
Senator Boren . . . to arrange for SSCI to acquire Agency records on allegations
that profits from drug trafficking were channeled to the Contras. Senator
Kerry claimed that there were CIA cables which had not been released to
the Iran/Contra Congressional investigation.
- A March 14, 1988 letter from Senator Pell to Senator Boren referred to
discussions between SFRC and SSCI Staff members. The letter stated that "the
CIA has a number of documents in its files relating to narcotics and the contras.
Specifically, these documents consist of cables to and from Central America
which originated with the CIA." The letter made a SFRC formal request
to the SSCI for assistance in gaining access to "the above mentioned
- A March 15, 1988 OCA memorandum from OCA to a DO Legal officer and LA Division
asked for a status report regarding a request from Senator Kerry for Agency
information concerning Contra financial support from drug trafficking. The
memorandum stated that LA Division was supposed to be reviewing cables Kerry
claimed had not been released to the Iran-Contra congressional investigation.
- A March 22, 1988 MFR by OCA officer Buckman described a meeting with SSCI
Staff members who again asked about the status of Senator Kerry's request
for documents relating to the Contras and narcotics. According to the MFR,
the SSCI interpreted the request to include "all cable traffic relating
to narcotics and Panama, Costa Rica, Nicaragua, Cuba, the Contras, and [John]
- A March 24, 1988 memorandum from OCA Director Helgerson to DDO Richard
Stolz, DDI Richard Kerr, the LA Division Chief , and three other component
officers noted that Senators Kerry and Pell and the SSCI Staff were seeking
information concerning narcotics reporting--specifically "CIA cable traffic
[operational traffic and DO intelligence reports] on . . . the Contras and
drugs." The memorandum commented that "realistically, we are likely
to have to respond somehow--fairly quickly--to the Kerry and Pell requests
regarding when we knew what, without passing raw reporting or operational
traffic to the SSCI." The memorandum then outlined a strategy of providing
DI finished intelligence products, rather than raw reporting, to the SSCI.
- A March 31, 1988 MFR by OCA Director Helgerson summarized a meeting with
SSCI Staff members on March 29, 1988. The MFR stated that Helgerson provided
the SSCI with a collection of materials that responded to the Kerry and Pell
requests. According to the MFR, Helgerson pointed out to the Staff members
that the collection did not include relevant material that had already been
passed to the SSCI and consisted of, for the most part, finished intelligence
products that reflected "all significant, substantive information available
to the Agency on the questions raised by the Senators." The MFR said
that the Helgerson noted that the package:
. . . did not include, and we have been unable to identify, any
significant new body of CIA information not previously passed to the Congress,
such as is alleged to exist by Senators Kerry and Pell . . . . We at CIA
are committed to no further action at this point, but I have no confidence
that the subject will not come up again fairly soon.
- "Talking Points," dated April 14, 1988, were prepared for DCI
Webster's use with Senators David Boren and William Cohen regarding Senator
Kerry's request to see all CIA cable traffic concerning the Contras and drug
trafficking. Attached to the talking points was an April 1, 1988 MFR that
summarized CIA's efforts to satisfy Kerry's request by providing him with
finished intelligence products. Also contained in the Talking Points were
two options to resolve the issue. One was to "ask the I[nspector] G[eneral]
to review all relevant materials, including operational cable traffic. The
DCI could offer to report on the IG's findings to the Intelligence Committee."
The other was to assist the SSCI Staff in conducting its own in-depth review
by providing "the detailed information on the Central American and other
narcotics problems" to a member of the Staff. The Staff would have to
obtain additional information from the other relevant agencies, such as DEA,
to accomplish its review, according to the Talking Points.
- A March 28, 1988 memorandum from DDCI Gates to DDI Kerr and DDO Stolz asked
that a briefing concerning Contra involvement in narcotics-related activities
be given to the HPSCI and SSCI on April 1, 1988. The material prepared for
that briefing as a result of this request included: (1) a narrative entitled
"Allegations of Resistance Activities in Narcotics Trafficking,"
which stated that, "All allegations implying that the CIA condoned, abetted
or participated in narcotics trafficking are false;" (2) a copy of a
March 31, 1988 memorandum entitled "Pilots, Airlines and Shipping Companies
Used in Resupply Efforts That May Have Had Past or Current Ties to Narcotics
Related Activities;" (3) a July 31, 1987 MFR prepared by a DO officer
that recorded Alan Fiers' July 31, 1987 testimony to the SSCI/HPSCI Staff
regarding Contra Narcotics Trafficking Allegations; and (4) seven documents
that provided information concerning the following Contra-related individuals
and organizations--Mike Palmer, Octaviano Cesar, Aldofo Chamorro, Barry Seal,
Marco Aguado, Markair, Sebastian Gonzalez, and David Mayorga. No information
has been found to indicate whether this specific briefing was provided to
the SSCI or HPSCI by Gates or any other Agency official.
- A May 3, 1988 OCA MFR summarized a meeting on April 22, 1988 between Dewey
Clarridge and two Staff members of the House Judiciary Committee's Subcommittee
on Crime. The MFR stated that Clarridge was interviewed regarding his knowledge
of drug trafficking by the Nicaraguan Government or the Contras. According
to the MFR, Clarridge discussed CIA's assistance to a 1984 DEA sting operation
that resulted in the indictment of Federico Vaughn, an aide to Nicaraguan
Interior Minister Tomas Borge, as a co-conspirator in a scheme to smuggle
drugs into the United States. Clarridge reportedly was also asked a series
of questions regarding alleged Contra involvement with drug smuggling. The
MFR stated that Clarridge responded that these allegations arose after he
left DO/Latin America Division--he was Chief of that Division from 1981 to
1984--and he was not in a position to comment on them.
- A May 18, 1988 letter from the Chairman and Vice Chairman of the SSCI to
DCI Webster informed Webster that the SSCI was initiating an inquiry into
"those aspects of the narcotics trafficking problem in Latin America
that fall within the Committee's jurisdiction." The letter also conveyed
a set of questions regarding Agency policy and procedure in general. One question
focused specifically on Contra linkage to drug trafficking:
When intelligence indicated drug involvement on the part of a
Contra or Contra-[sic] supply personality or of a high-ranking
military officer (e.g., in Honduras, Haiti or Panama), was this information
highlighted for policy-makers in DEA, State and DoD, or brought to the attention
of the National Drug Enforcement Policy Board (NDEPB) or an appropriate
committee thereof? Did the handling of information pointing to US allies
differ from that regarding our adversaries?
(Underlining in original.)
- A June 9, 1988 DO MFR documented a June 8, 1988 meeting between SSCI Staff
members and CIA personnel to review the questions the SSCI inquiry was going
to address. The MFR indicated that the specific question regarding Contra
linkage to drug trafficking "refers only to specific persons whom [CIA]
can identify." The CIA's answer to this SSCI question was provided in
a July 6, 1988 memorandum that stated:
There were a few raw intelligence reports from DO field stations
which indicated Contras or contra-supporters may have been involved in illegal
narcotics trafficking. These reports were disseminated through regular intelligence
channels to senior policymakers, including those at State, DIA, NSA and
other appropriate agencies.
- On February 22, 1989, shortly after November 1988 allegations of drug trafficking
by Juan Ramon Rivas Romero--a Northern Front Contra leader who had been jailed
for drug trafficking prior to his association with the Contras--Deputy General
Counsel for Operations John Rizzo advised DDO Stolz that:
I agree that it would be prudent to advise HPSCI and SSCI of this
matter, although I should note that when I mentioned this to John Helgerson
last week his initial reaction was that the whole thing was too dated and
trivial to warrant telling the committees . . . .
My only suggestion is that if and when we notify we do it low-key and
on the staff level, since I don't think we have anything to be defensive
- A March 10, 1989 MFR from OCA Deputy Director for Legislation John Golden
advised OCA Director Helgerson that:
. . . the incident involving [Rivas] some 10 years ago may be
viewed by some as being more than trivial. I noted that Norm Gardner [the
Deputy Director, House Affairs, OCA] indicated [Rivas] had not been [questioned
by CIA Security] on this issue and his current whereabouts are unknown.
I recommended to John Helgerson that the Committees be informed of the fact
that we recently learned of this matter and wish to bring it to their attention.
It is understood that we have no reason to believe [Rivas] was involved
in narcotics beyond the mentioned incident . . . . John Helgerson . . .
. subsequently told me that he would have the committee staff so informed.
- A March 15, 1989 CATF memorandum provided "Talking Points" for
OCA use to brief the HPSCI and SSCI regarding Rivas. The memorandum outlined
Rivas' involvement in drug activities in Colombia in 1979; his arrest, incarceration
and escape; and briefly described his record as "the ERN/N[orth]'s most
capable commander." It also noted that:
Rivas is not on the Drug Enforcement Administration (DEA) "watchlist,"
and, according to DEA, there is no indication that Rivas is currently involved
in illicit drug activity. Further, DEA considers the information on Rivas
"historical" . . . .
- According to a March 15, 1989 MFR by OCA Deputy Director for Senate Affairs
Buckman, SSCI Staff member David Holliday had been briefed that day concerning
Rivas. Holliday reportedly had been informed that the Department of State
had determined that Rivas "should be removed from his post and that Resistance
leaders agreed." The same memorandum noted that Holliday stated "that
he would inform the Committee. He did not regard this as a serious matter."
According to a March 16, 1989 MFR drafted by OCA, HPSCI Staff member Mike
O'Neil was briefed telephonically on the same date regarding Rivas. The MFR
noted that O'Neil "appreciated the briefing but had no real comments
or remarks to make."
- A March 16, 1989 briefing paper entitled "Outline for HPSCI Political
Action Briefing on 17 March 1989" stated that CATF would brief HPSCI
Staff members on March 17 regarding a list of topics. A March 28, 1989 CATF
MFR reported that this briefing was accomplished on March 17, 1989 by the
CATF Chief of Operations to HPSCI Staff members Dick Giza, Mike O'Neil, Duane
Andrews, and Steve Nelson. The MFR also reported that the Chief of Operations
briefed the HPSCI Staff members about allegations of drug trafficking concerning
Rivas. He reportedly informed the Staff that the Department of State had decided
that Rivas would be "separated from the Resistance" and that State
had informed Contra leader Enrique Bermudez of this decision on March 14.
In response to a question concerning U.S. Government support for Rivas, the
Chief of Operations reportedly said that CIA was not planning to assist in
resettling Rivas, that Rivas may have received family assistance funds from
the Agency for International Development and that Rivas had never received
a salary from the CIA.
- Individual Statements. John Stein, DDO from July 1981 to July 1984,
says that he was not involved in the Contra program as DDO. DCI Casey and
LA Division Chief "Dewey" Clarridge ran the Contra program but would
keep him informed. Stein says he knew enough to brief Congress since Casey
"was not welcome" in Congress to discuss this matter.
- The CATF Deputy Chief and Chief from 1982 to 1984, states that the HPSCI
was kept fully informed of significant events in the Contra program on a weekly
or biweekly basis. He does not recall allegations of drug trafficking by the
Contras during his tenure, but notes that such allegations would have triggered
"alarm bells" because of the politically charged atmosphere at the
- John McMahon, DDCI from June 1982 to March 1986, says that he did most
of the briefings to Congress regarding "unsavory" issues, but does
not recall briefing Congress regarding allegations of Contra drug trafficking.
If there were a need to discuss issues in confidence, he would have done so
with the Chairman and the Vice Chairman or Ranking Minority Member only. McMahon
says that he would not let CATF do something that should not be done and that
the ground rules were to be honest with Congress.
- An officer who was CATF Chief from 1982-1983 and LA Division Chief from
1986-1989, responded to written questions from OIG and wrote:
. . . No . . . programs ever conducted by the Agency during my
tenure was [sic] ever run as transparently as the Central American
and Nicaraguan programs. Congressional members and staffers traveled frequently
throughout the area and received extensive and detailed briefings on virtually
every aspect of the program. Over a period of years the staffers became
intimately familiar with the Contra program, and they would have been the
first to call our attention to any problems in reporting on allegations
of drug trafficking by Contras or Contra-related individuals.
. . . .
I do not remember participating in any briefing of Congressional members
or staffers in regard to drug-related activities by the Contras or Contra-related
- Robert Gates, DDCI from April 1986 to January 1987 and May 1987 to March
1989 and ADCI from January to May 1987, says the Agency had an obligation
to terminate its relationship with any asset suspected by law enforcement
agencies to be engaged in drug trafficking. Gates says that he would not have
made an exception and allowed the use of an asset who had past or present
involvement in drug trafficking without getting it cleared through Congress
and DoJ. Gates notes that, with the Agency's involvement in the Iran-Contra
affair, it "needed to be purer than Caesar's wife."
- After the $100 million congressional funding authorization in 1986, Gates
says there were many legislative enactments that affected the Contra program--what
could or could not be done--and constant discussions with congressional staff
members who were closer to the issues than individual Committee members. Gates
says he went directly to the Chairman or Vice Chairman of the intelligence
oversight committees when something was particularly sensitive. As ADCI, Gates
says he met with the Chairmen or Vice Chairmen every two to four weeks, discussing
a long list of items. According to Gates, representatives of the Agency's
Office of Congressional Affairs accompanied him and wrote extensive memoranda
of these meetings.
- Richard Stolz, DDO from January 1988 to December 1990, says he recalls
no drug trafficking connection to the Contras. According to Stolz, the Agency's
Counternarcotics Center took the lead in briefing Congress on counternarcotics
- Current DCI George Tenet recalls that the SSCI held quarterly hearings
on certain CIA activities while he was serving as an SSCI Staff member and
Staff Director. Additionally, Tenet recalls that Senator Bill Bradley was
personally interested in Nicaragua, received weekly or biweekly briefings
on Nicaraguan covert action matters and regularly met with CATF Chief Alan
Fiers and other U.S. Government policy officials regarding Nicaragua. Tenet
does not, however, recall any briefings of the SSCI by Fiers concerning allegations
of Contra involvement in narcotics trafficking.
- James Dykstra, former Minority Staff Director for the SSCI, says that biweekly
briefings regarding the Contras were held at the request of Senator Bill Bradley
who was the only Senator who regularly attended these briefings. Dykstra recalls
that the Agency initially resisted the biweekly briefings and recorded transcripts,
but ultimately agreed. Dykstra says that, in retrospect, it was good that
Senator Bradley insisted on transcripts so issues were placed on the record.
Dykstra recalls that Fiers also regularly briefed the SSCI Staff.
- Dykstra says that 1986-1987 was a "time of tension" due to the
controversy over an Intelligence Oversight Bill. Dykstra says that former
DCI William Casey also had strained relationships with Senator David Durenberger--then
Chairman of the SSCI--and others in that time period. Dykstra says that, with
all this tension, however, Fiers had developed an informal, friendly relationship
with all the Senators and SSCI Staff members.
- Then-OCA Director John Helgerson states:
. . . I did not undertake to provide all raw reporting of the
DO to non-intelligence committees. I did work with the SSCI [Staff Director
Sven Holmes] to provide other committees [sic] members with the material
we and the SSCI judged met their needs within the limits of the guideline
set by the DCI & [sic] DDO.
. . .
The general DCI & DDO policy was to provide no raw traffic to non-cleared
people on non-intell[igence] Committees. I recall that perfectly. [Concerning
the Kerry SFRC subcommittee request for CIA documents] we (CIA) and the
SSCI negotiated some exceptions designed to meet the legitimate needs
of the Congress. Most of the limited raw traffic shown was shown to the
SSCI; less to non-SSCI staff.
. . .
The DCI's policy, and mine, was to give the SSCI & HPSCI everything
appropriate to their inquiries. When requests came from those (oversight)
committees for cable traffic and/or raw reports, we (DCI, DDO & me)
negotiated with the Committees regarding what, exactly, they needed, &
to my memory met their needs. When requests came from non-oversight committees,
we negotiated with the SSCI and/or HPSCI on how best to respond.
Helgerson says that his role as Director/OCA was to make sure that the
appropriate DO and DI officers "hooked up" with Committee and
Staff members to provide substantive briefings regarding the Contras as
required. He states that OCA, however, relied on Agency components to provide
full and accurate information to Congress. Helgerson does not recall briefings
regarding Contras and narcotics trafficking." Helgerson notes:
I do recall more general questions about Noriega, Contras, and
drugs. Very few of these questions originated with the oversight committees--they
were primarily passing on the questions of others, as I recall.
- Helgerson says that Senators John Kerry and Claiborne Pell, who were not
on the SSCI, were driving SSCI Staff Director Sven Holmes and the other SSCI
Staff members on the issue of Contras and narcotics. He says that the SSCI
Members and Staff were not "taken" with the topic and were very
frustrated by the tasking from Senators Kerry and Pell. Helgerson says that
he recalls there were two problems from an Agency perspective. First, there
was virtually no guidance from Senators Kerry or Pell in terms of the specific
information they wanted regarding drugs and Contras --that is, Kerry and Pell
were on a "fishing expedition" and would ask "Give us everything
you've got" which was too broad. Second, he does not recall how much
"raw traffic" could be provided in summary and how much could be
provided to the non-cleared people working on the Kerry subcommittee. He says
that he recalls that Agency officers sometimes showed documents to the Kerry
Staff members in the SSCI secure office space.
- Helgerson says that he does not recall a concerted effort by the Agency
to get to the bottom of the allegations of narcotics trafficking. The Agency,
as he puts it, was in the intelligence business, not law enforcement.
- Helgerson says that he was never comfortable that he was providing the
intelligence oversight committees with everything the Agency had on a particular
issue because the Agency's information on any subject was held in multiple
files and data bases and OCA had to rely on the DI and DO to conduct thorough
searches and provide complete responses. He says he was less comfortable with
DDO Clair George than with Richard Stolz who succeeded George as DDO in January
1988. Stolz, he recalls, encouraged a "much more cooperative attitude"
in the DO's dealings with the Congress. However, he says he is not aware of
any decision to withhold cable traffic from SSCI or HPSCI Staff members.
- Helgerson says that OCA representatives were not always present at all
briefings of the committees, particularly CATF matters in which Fiers enjoyed
great autonomy. Fiers, according to Helgerson, often dealt directly with the
DDO and even the DCI. As to whether SSCI and HPSCI Staff members could make
decisions or provide advice to Agency briefers on sensitive issues without
consulting the Chairmen or Ranking Minority Members, Helgerson says that he
was amazed at the level of sensitive issues on which Staff members rendered
- An officer who was a Central American COS from 1987 to 1989 and LA Division
Chief 1989 to 1992, states in a written response to OIG questions that there
was "constant" communication with the oversight committees during
the time he was involved in Central American matters. He recalls that Staff
members came to CIA Headquarters regularly for briefings and frequently visited
Richard B. Still
L. Britt Snider