Dark Alliance – The CIA, Contras, and the Crack-Cocaine Epidemic

The Myth of the 20th Century – Ep05 – Dark Alliance – The CIA, Contras, and the Crack-Cocaine Epidemic

– “Tyranny is defined as that which is legal for the government but illegal for the citizenry.”

‘Dark Alliance’ was published in 1998 by Gary Webb, a former journalist for the San Jose Mercury News, who after writing a series of articles on the connections between the Nicaraguan Contras, the CIA, and the selling of crack-cocaine in America’s inner cities, lost his job, and in 2004, was found dead with two gunshots to the head and a suicide note. Unravelling his death, along with that of many others who got too close to this still unresolved issue in American history, is the focus of our discussion today. Whether you agree with Mr. Webb’s findings or not, he paid the ultimate price, and without men like him trying to uncover the truth, I believe America would be a much darker place.

For God and Country

During the 1970s Anastasio Somoza, President of Nicaragua, had grown frustrated with the United States as Jimmy Carter’s administration began criticizing Somoza’s National Guard (La Guardia) human rights abuses and wouldn’t help him put down communist uprisings. Somoza believed his help during the Bay of Pigs providing logistical support and helping the CIA put down a liberal / communist leader in Guatemala in the 1950s, and again in the Dominican Republic in 1965, would ensure some level of support from the United States, but in 1979 he was deposed by the Sandinista government with backing from Russia. In the chaos, many Nicaraguan expats moved up to United States. Danilo Blandon, fleeing Nicaragua and getting a job in East LA with the Torres brothers, who would later become major cocaine dealers, founded the FDN, which later became known as the Contras, to fight against the Sandinistas.

Anastasio Somoza

The CIA’s new Project

When the CIA learned of the Contra movement, they recruited several Nicaraguans like Enrique Bermudes – who had been trained previously in American military schools on subversion – to work with the CIA in supporting the Contra’s anti-communist activities. Meneses – a prominent Nicaraguan drug dealer in the Bay Area – became convinced to start help funding the Contras after visiting a CIA-run training camp for them on the Nicaraguan border in Honduras. Castro had been training the Sandinistas in subversion against CIA operations for over 20 years by the time the Contras began forming, and Reagan and Bush saw another Cuba growing with the Sandinistas. They didn’t view the Contras as the brutal remnants of La Guardia, but rather as freedom fighters. Upon taking office, Reagan immediately cut all aid to the Sandinista government, and authorized the the CIA to undertake means to undermine their shipment of arms to El Salvador. Congress caught wind of a CIA-backed mining of a harbor in Nicaragua, and immediate suspended funding of all Contra operations.


The Contras go Underground

Ronald Lister, shady CIA officer and surveillance expert had access to sophisticated satellite communications and hookups. Lister’s company Pyramid Security offered a bid of $191k for armed security to Salvadoran public officials, including the president, as well as protecting key installations, and installing sophisticated electronics such as radio sensors and explosives detectors at key military and industrial installations. However, one of Lister’s associates, a San Diego arms manufacturer, said Lister’s proposal was merely a front for setting up a sophisticated CIA weapons manufacturing facility in El Salvador to supply the Contras.

Wackenhut, a prominent private security company, became very active in El Salvador during the Contra war, providing employees to protect the US Embassy and other installations; it had a relations with the Cabazon Indian tribe to use their reservation for special tax exempt status to help in obtaining federal weapons contracts. (A side note: Wackenhut, which later became G4S Secure Solutions, was Omar Matteen’s employer, the infamous Orlando nightclub shooter in 2016.) A freelance reporter named Danny Casalaro was looking into the Cabazon-Wackenhut projects was later found dead in a West Virginian motel room in 1991 – allegedly a suicide victim. He had told friends he was convinced the site was being used to make weapons for third world armies, including that of the Contras. In 1994 a nationwide investigation was launched in Casalaro’s death by then assistant attorney general Web Hubbell, who himself was later brought up on charges during the Whitewater controversy.

Terry Reed, a former Air Force officer and machine-tool expert who became a FBI informant, had initially been recruited to train would-be Contra pilots at a clandestine air strip near Nella, Arkansas. Later, he was asked by the CIA to set up a weapons parts facility in Arkansas and then in Mexico for the manufacture of untraceable parts to be sent to the Contras. Reed claims the CIA was moving cocaine through the machine shop he had set up in Guadalajara, Mexico, and that a US parking meter company was secretly manufacturing M-16 parts to be smuggled in to supply the Contras. Reed had consistent dealings with a CIA-DEA contract agent named Adler Berryman-Seal, a former airline pilot. In 1982 Seal moved from Baton Rouge to an isolated airfield in Mena, Arkansas, an inter-regional mountain airport, and started running drugs and weapons for the Midellin cartel. Estimates say he smuggled in approximately $5 billion of drugs. Seal was found murdered in 1986 in New Orleans allegedly by two Columbian hitmen. 4 months later Oliver North phoned the FBI and claimed there was an active measures initiative against him by the Sandinistas – people were following him, making death threats. Critics of the Clintons have asked how Clinton, who was governor of Arkansas at the time, did not know about large quantities of drugs being flown in. State Troopers L.D. Brown and Lt. Patterson, part of Clinton’s security detail, have insisted Clinton knew about the cocaine, and that is was a CIA operation. Mena air field mechanic John Bender swore in a deposition that he saw Clinton there three times.


Costa Rican airfields were used extensively for refueling of cargo planes flying cocaine from Columbia and Nicaragua. An american named John Hull was providing transshipment services from his private air strip located on his 1,600 acre ranch in Costa Rica. He was one of Oliver North’s men, doing the CIA’s dirty work without public disclosures.

The Iran-Contra scandal literally blew up when the Sandinistas shot down a C-123K with a SAM-7 missile. The plane had been based at Mena before Seal sold it, and it began flying weapons hauling missions for Oliver North and the FDN (Contras.) Claims were also made that Seal had been working for the DIA (the Defense Departments intelligence agency) since 1982, and that the DIA was involved in Lister’s weapons manufacturing plant in El Salvador.

CIA Director William Casey leaked to Newsweek in 1982 a full-featured story replete with photographs of soldiers parachuting into the jungles on Nicaragua about the “ongoing” Contra operation under the theory that people would have to support such an initiative lest they be criticized for failing to commit as had seemingly happened during the Bay of Pigs. It backfired, however, and Congress in December 1982 passed the Boland Amendment by a vote of 411-0, limiting US government funding in Nicaragua. William Casey then contacted Oliver North, head of the national security council, to head up a task force to find extra-congressional funding for the Contras. Oliver North later revealed that only about 3% of the cocaine revenues actually went to the Contras.


Cocaine in the 70s and 80s had become associated with the rich and famous in America, and was perceived as a relatively harmless drug that the powerful occasionally indulged in, leaving them with no hangover and was frankly too expensive for most people to abuse. Crack, however, smoked instead of snorted, was much cheaper, and the high was so strong that it became incredibly addictive, leaving users craving it and suffering severe withdrawals without a fix. Traveling to Lima, Peru, where the first signs of cocaine smoking (of the paste filled with solvents produced as waste from cocaine manufacturing) were emerging, researchers noticed entire middle class neighborhoods with gaunt looking individuals, strung out, and testing at thousands of nanograms per milligram of cocaine in the blood plasma samples, whereas cocaine was around 100. Freebasing, emerging as the first signs of cocaine smoking in the United States, was discovered in the San Francisco Bay Area in the late 1970s by reverse engineering the refined cocaine powder product, which doesn’t burn at low temperatures, into a more combustable product by freeing them of the salts, making the residue more volatile – hence the term freebasing. It didn’t go widespread, however, because it was even more expensive than cocaine; nonetheless, people started to take notice at its effects.


Running drugs through the Blood and Crips gangs, Ricky “Freeway” Ross became the largest crack/cocaine wholesaler, selling 100 kilos a week by ’84/’85. A Los Angeles reporter who interviewed him in 1994 said he didn’t have the attitude of a gang-banger – he was more of a capitalist. Ross, who couldn’t even read or write by the time he got to be a senior – the teachers just kept passing him with Cs and Ds – got involved in the cocaine trade through his tennis coach, who was dealing part time. The model that Ross and Blandon had developed began appearing throughout the United States aided by Crip-Blood distribution channels in Chicago, Philadelphia, Washington D.C., and other inner city neighborhoods. As the profits of drugs attracted the gangs, they went from low-level operations to extremely violent ones, obtaining assault weapons like M-16s and AKs and distributing them widely by 1986. Menezes supplied 50,000 kilos of cocaine to Blandon from 1980 to 1991.


Crack was so addictive, “one hit was one too many, and a million hits is not enough – it’s the worst drug to ever hit the face of the earth” said ‘Big Shiphead’, a Shotgun Crip gang member since age 12. Drug researcher James Inciardi in Miami, somewhat hardened by his work, still couldn’t believe how awful the crack houses were. He saw once an emaciated and comatose 14 year old get gang raped on a filthy mattress by 4 men in succession.

Loose Ends

Hugo Spadafora, physician who later became politically active in support of the Victoriano Lorenzo Brigade, a sympathy group of the Contras against the Sandinista regime. When he became critical of Manuel Noriega’s drug dealing, he was murdered in a conspiracy backed by Noriega (proven by a court under the administration of President Guillermo Endara.) The manner in which Spadafora was murdered was particularly brutal: “His body bore evidence of unimaginable tortures. The thigh muscles had been neatly sliced so he could not close his legs, and then something had been jammed up his rectum, tearing it apart. His testicles were swollen horribly, the result of prolonged garroting, his ribs were broken, and then, while he was still alive, his head had been sawed off with a butcher’s knife.” During Oliver North’s testimony, he stated that Noriega had been given a mandate to annihilate the Sandinistas, in exchange for the US helping him clean up his public image.


North had become adept at establishing shell operations (such as a Costa Rican shrimp company used to launder cash transfers) to hide CIA connections, which he had been trained in how to do, which he also admitted during testimony; much of the official traffic was under the guise of “humanitarian aid.” Testimony revealed that flights of cocaine had been brought to US Air Force bases in Texas, but when requested under FOIA in 1997 the Air Force claimed all records of flights of military planes from El Salvador in the 1980s had long since been destroyed. Colombian drug trafficker Allen Rudd testified that Vice President George H.W. Bush had made a deal with the Medellin Cartel, run by Pablo Escobar, to allow their smuggling of cocaine into the United States in exchange for the cartel running guns to the Contras. Cele Castillo, head of DEA’s Latin American operations, discovered Contra pilots were flying cocaine into the United States and the involvement of Colonel Oliver North; his findings, however, were officially covered up / ignored, on orders by North.

Dirty Dealings

Bell County sheriff Gouzetta, who had seen his brother murdered by drug dealers, cooperated in drug enforcement agents on drug busts, splitting money finds with the federal agents, which had become a preferred method of funding since California Proposition 13 had cut county property tax rates and consequent reductions in local services funding. L.A. County sheriffs Huffman and Wilbur found evidence linking Contra bank accounts and the CIA, but they were worried about cooperating with the FBI, Justice Department, and DEA, who they thought might “burn them.”

On September 23rd, 1986, Sergeant Tom Gordon, ignoring Costa Rican DEA agent Sandy Gonzalez warning, went to the L.A. Country municipal court, went before a judge, and applied for a warrant to investigate the Nicaraguan drug operation; his 21 page sworn statement described a “large scale cocaine distributing organization, made up of over well over 100 persons storing, transporting, and distributing cocaine for Danilo Blandon.” Gordon linked Blandon to one of Rick Ross’ suppliers, “Blandon has up to 20 kilos of cocaine delivered to Argueas, who in turn delivers to blacks in South Central L.A.” “Bladon is from Nicaragua.. Blandon is a sympathizer with the Contras, and a founder of the Fronte de Democratica Nicaragua, FDN, an organization that assists the Contras with money and arms; money from this organization comes through the sale of cocaine.” Gordon listed Miami money laundering operations which were used to buy arms; he pointed to ex-Laguna Beach cop Ronald Lister who had access to large quantities of heavy weapons.

This affidavit came at a time when the national news media was in a frenzy after Barry Seal’s C-123 cargo plane was shot down in Nicaragua carrying weapons, which the CIA denied any connection to, but amidst a set of allegations of U.S. government involvement in other arms deals in the Nicaraguan jungles suspicions were high. The Sandinistas captured Eugene Hassenfuss, the only pilot of the plane wearing a parachute; he had worked for the CIA’s Air America corporation during the Vietnam War in Laos, told the press he was again working with the CIA. This had come about during the $100 million Contra funding bill, which the CIA helped pass by hiring numerous disinformation candidates to testify before Congress giving bewildering and contradictory information.


After an El Salvadoran appeared to lose his life when he absconded with a copy of Ronald Lister’s security proposal for arms in Central America, evidence later surfaced showing Lister was involved with selling arms to Iran (for negotiations in releasing hostages captured in Lebanon), using drug money obtained from the Contras. Darryl MccIntyre, prosecutor of the L.A. end of the frogmen case, also dropped dead – he had been investigating some of the Columbian line freighters who had dropped off the cocaine at Hunter’s Point in San Francisco had continued south towards Los Angeles. Others were found dead of “cocaine overdoses” who were also investigating cocaine trafficking.

Things caught up to Ricky Ross as well. After a high-speed chase led to assault of an officer, and what seemed to be an officer planting a kilo of cocaine in a duffel bag and blaming it on Ross, who later fled the scene, Ross turned himself in when his friends were getting interrogated. $31 million was seized, and 62 firearms, including revolvers, semi-automatic pistols, shotguns, Uzis, Mac-10s, fully automatic Mac-11 machine gun, as well as 5 bullet proof vests. Ross was released, however, on a motion to dismiss when they found the police had used illegal conversation tapings and a possible beating of his brother.


The Los Angeles County Sheriff’s Department Majors had hauled in almost $70 million over two years during drug busts, along with 66 houses, 110 vehicles, 4 airplanes, and 2 businesses. They used some of this bounty, however, to pay for vacation homes, wide screen TVs, plastic surgery, and jewelry, often taking some of the seized money and only turning in part of it. The Majors were brought to trial, and the jury didn’t take kindly to hearing a voice recording of them during a meeting bragging about how they had helped themselves to drug money. During the 1990 trial, dubbed the “Big Spender Case”, one of defense attorney Braun asked an FBI agent if he was aware of any dealings between the CIA and the Contras, to which the prosecution leapt to their feet in protest; the judge delivered a gag-order on the further discussion of Iran-Contra due to lack of relevance. The Majors were largely found guilty and sentenced to around 10 years each, and Gouzetta was accused of stealing 7 kilos of cocaine, which they eventually couldn’t prove – it damaged his reputation, however, and convinced him he was being targeted as part of a conspiracy to cover up Blandon’s CIA dealings. During the trial, an officer Smith accused President Bush of being ultimately responsible for the drug running, pointing to his involvement with the CIA


Norwin Meneses was indicted and a warrant issued for his arrest, but both were sealed in a San Francisco court house, and he was not was not reported to NCIC, the computer databases police use to track criminals. If he had been stopped for a traffic ticket or detained at an airport, peace officers would not know to arrest him. Meneses had devised fairly ingenious schemes for smuggling cocaine into the United States: 1., he was flying cocaine out of an airstrip in Nicaragua out of radar range, and 2. he was driving vehicles through Texas and California containing PVC pipes filled with cocaine welded into their frames. Meneses claimed he “had the backing of a superpower”; despite this, however, he was eventually convicted and sent to prison for 30 years after a Nicaraguan police officer was able to collect enough evidence to put him behind bars in Nicaragua, raising suspicions as to why the DEA couldn’t do that in the United States with all the sophisticated surveillance equipment in their possession.

As the author began interviewing Ross in 1995 prior to his trial and attempted to get close to Blandon, DEA agents, including agent Jones, approached him and tried to dismiss his theories about connections between cocaine, Blandon and the Contras; they even asked him if he had kids, seeming to try to intimidate; Jones defended their complaints by saying Webb’s article would blow a lot of undercover operatives’ cover. Working with a colleague in Nicaragua, Webb planned a trip to interview Meneses’ chief accuser Miranda, but the night before he escaped from prison and was thought to be somewhere in Miami – where he had been issued a 10 year visa by the US State Department – despite having had been a convicted drug smuggler. Prior to Ross’ trial, motion by US attorney O’neill was filed with the court to suppress all mention of the CIA connection to the Contras on the argument that the government had assured that those connections were false, and that any mention of it by the defense attorneys would be used to “bulley-rag” the government into putting less pressure on the defendant.


After attracting a lot of pressure from powerful interests in Washington and ridicule from the New York Times, Los Angeles Times, and the Washington Post, Jerry Seppos editor at the SJMN decided to write a column retracting much of Webb’s findings in ‘Dark Alliance’. This infuriated Webb, and he leaked to the media that Seppos had suppressed 4 stories of his; after talk radio picked this up and had a field day, Webb was ultimately forced to resign. Webb had tried to clarify with the CIA and his FOIA requests were denied on national security grounds. He was given a similar runaround with the DEA, where they denied him access on privacy grounds for the drug dealers. The FBI said it would take up to two years for a reply; the INS never responded, and the same story occurred with the State Department. CIA director George Tenet stated the Iran-Contra scandal had left an indelible impression on the American Public that the CIA may never again be trusted.


Manuel Noriega, who had been assisting the CIA in their operations, refused to give certain aid to the Contras, and at that point their relationship started to fray; eventually some accused him of drug smuggling, and the H.W. Bush administration invaded the country, deposing him, and arresting Noriega on drug charges; during the trial, Noriega wished to state he had received close to $10 million from the CIA, but the government stipulated that it had paid him only $200K, and that any inclusion of his details working the CIA would simply “confuse the jury”; the district court ruled that “information about the content of the discrete operations in which Noriega had engaged in exchange for the alleged payments was irrelevant to his defense.” Webb sought to clarify that crack was not a CIA invention, nor was it being targeted at the black community, but it was rather something they turned a blind eye to because it supported their objectives with the Contras; Ricky Ross backs this theory up.


However, the CIA aiding cocaine smuggling in Central America was not an isolated incident – evidence tying CIA to heroin trafficking out of Laos during the Vietnam War, and even back in WWII as the OSS running opium out of Turkey with the help of Lucky Luciano, leads one to question the innocence of the organization. Many reports that these things are still going on in Afghanistan, which supplies 90% of the world’s opium, the main ingredient for heroin. And with ongoing scandals involving guns and drugs south of the American border such as that found in ‘Fast and Furious’ crime continues to spill into the United States from Mexico, Central America with the Latin American gangs. Two young women were just murdered on Long Island by MS-13 gang members, a gang having origins in California. And as the American economy continues to stagnate, with middle class manufacturing jobs disappearing, heroin and other drug overdoses have risen to levels not seen since the days of the crack epidemic of the 90s.



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