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
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
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," Fiers writes:
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
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
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
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
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.
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 SETCO Air."
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 record"
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
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 or Caballero.
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 in Detroit.
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.
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 any contraband.
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 with [CIA]."
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.
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 . . . .
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 into
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.
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
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
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
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.
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 IG Donnelly.
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 than
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
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
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
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 against him.
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
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
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.
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
Background. Alan Hyde is a Honduran citizen and businessman
whose company, Mariscos Hybur, provided logistical support to the Contras from
mid-1987 to late 1988 or early 1989.
Allegations Of Drug Trafficking. A September 1984 report from
the U.S. Defense Attaché Office (USDAO) in Tegucigalpa stated that a "Mr.
Hyde," who "purportedly owns some 15 boats and a fish processing plant
in French Harbor [Roatan]," said that "he is making much money dealing
in 'white gold,' i.e., cocaine." A USDAO comment in the report stated that
the description "fits that of Alan Hyde of Mariscos Hybur S.A."
A February 27, 1985 Headquarters cable summarized traces received concerning
possible maritime narcotics trafficking in the Caribbean and cited the September
1984 USDAO report that "Hyde claims to be making a lot of money selling
On October 30, 1985, a cable to Headquarters reported that Hyde had
boasted in mid-October that Hyde had two U.S. Customs Service agents "in
his pocket." Hyde had reportedly also said that he had friends in the "Cosa
A December 1986 report from the U.S. Coast Guard's Miami office stated
that organized criminal activity on Roatan Island had been increasing for the
prior two years, according to two reliable sources. The Coast Guard report
cited "rumors" that cocaine was warehoused on Roatan for shipment on
coastal cargo and fishing vessels bound for south Florida. Named among the
associates of the "organized criminal organization" were Hyde, owner
of Hyde Shipping of Miami, and members of his family. The Coast Guard report
also cited sources who named Hyde as the master of the vessel F/V Bobby in 1985
as a favor to Pablo Escobar, a major Colombian cocaine trafficker. Hyde was
also rumored to be involved in loading cocaine into containerized cargo at
Puerto Cortez, Honduras.
On December 31, 1986, the U. S. Coast Guard/Miami issued a report to CIA
indicating that Hyde's brother-in-law had sold up to six kilograms of cocaine in
February-October 1986. The report also cited sources who claimed that Hyde
Shipping purchased fishing vessels in Brownsville, Texas, in 1986 that were to
have transited the Panama Canal, but instead sailed directly to Cartegena,
Colombia, to be outfitted for drug smuggling.
An April 22, 1987, Headquarters cable stated that U.S. Government law
enforcement agencies were "very familiar" with Hyde and others on
Roatan Island. These individuals, according to the cable, were believed to be
involved in international drug trafficking.
An unsigned, undated memorandum marked with a handwritten notation that
stated "FM: USG C. July 1987" described Hyde as a "big time drug
trafficker" who "probably runs cocaine to U.S. using the Hybur Clipper
or Hybur Transport." It is "strongly believed," the memorandum
stated, that the Hybur Clipper, a vessel operated by Hyde Shipping, "is or
has been used to transport cocaine to Miami." Hybur Transport, it was
noted, "is believed to have been used for cocaine transport as early as
1976." The memorandum cited three unsuccessful Coast Guard attempts--one
in 1976 and two in 1985--to capture Hybur vessels believed to be running drugs,
and noted that a "Luis Hyde" of Roatan had been arrested in January
1985 by the U.S. Coast Guard aboard a freighter carrying 200 pounds of cocaine.
Business cards for Hyde Shipping were reportedly found on board. The memorandum
did not indicate whether Luis Hyde was a relative of Alan Hyde.
A July 11, 1987 Headquarters cable stated that the U.S. Coast Guard had
placed three Hyde vessels on its watch list for suspected drug smuggling. A
July 20, 1987 cable to Headquarters reported that, according to Honduran
military officers, there was a widespread belief that Hyde had been using his
fishing fleet and personal plane for "at least the last five years for
transporting illegal substances," including drugs. The cable added that
Hyde was well connected to "highly placed Honduran officials" and
that, while the allegations against him cannot be confirmed," the popular
belief is that Hyde has insulated himself from prosecution by judicious use of
On September 23, 1987, the U.S. Coast Guard reported to CIA and other
agencies concerning a smuggling network based in the Bay Islands located off the
coast of Honduras. According to reliable sources cited in the Coast Guard
report, Hyde was the "'godfather' for all criminal activities originating
in the BayIslands and the [Honduran] mainland." He had, the Coast
Guard reported, allegedly maintained numerous bank accounts in Grand Cayman and
in Panama, pressed the Government of Honduras to refrain from establishing a
greater presence in the Bay Islands, and diverted weapons destined for the
Contras. On October 9, 1987, a cable to Headquarters indicated
receipt of a Honduran report that named Hyde and several others on Roatan as
suspected narcotics traffickers.
On March 17, 1988, the Agency's Directorate of Intelligence issued an
intelligence assessment entitled "Honduras: Emerging Player in the Drug
Trade." That assessment stated that a U.S. Coast Guard source had
identified Hyde and another family in the Bay Islands as using their legitimate
businesses to transport cocaine refining chemicals and guns from the United
States to Honduras on commercial fishing vessels. The source reportedly alleged
that the chemicals were destined for two cocaine processing labs on Roatan or
for processing operations in Colombia. Another Coast Guard source cited in the
assessment claimed Hyde had laundered $4-5 million through shell companies in
Panama in 1986.
A March 9, 1988 memorandum from the Acting LA Division Chief to DDO
Richard Stolz pertained to the use of Hyde and Mariscos Hybur. That memorandum
cited February 1988 U.S. Coast Guard reporting that Hyde headed an air smuggling
ring that operated out of Honduras with contacts in the Tampa/St. Petersburg
CIA Response to Allegations of Drug Trafficking. A CIA officer
recalls that Hyde "offered his help" to the Agency in 1986. However,
CIA decided to reject this offer, he says, because a records check with U.S. law
enforcement agencies produced derogatory information.
Another CIA officer recalls that there was a lot of radio communication
between the field and Headquarters regarding Hyde. The first cable
communication regarding these arrangements that has been found is a July 8, 1987
cable to Headquarters that included a summary of discussions with Hyde and
indicated that using Hyde's vessels to ferry supplies would be more economical,
secure and time efficient than using aircraft. The following day,
July 9, CATF replied that information available at Headquarters indicated that
Hyde might have ties to drug traffickers and directed CIA personnel "make
no new commitments with Hyde until this information can be explored." The
Headquarters cable, however, authorized a continuation of ongoing work.
Headquarters requested on July 10, 1987 that DEA, FBI and the U.S.
Customs Service provide traces regarding Hyde. A July 11, cable
summarized the derogatory information that was available to Headquarters at the
time, but added that none of this information was "firm proof that [Hyde]
is involved in [drug] smuggling or nefarious activities." Nonetheless, the
cable stressed that:
We cannot . . . authorize [CIA] entering a relationship with [Hyde]
until we are satisfied, through traces and the use of other [Security
resources], that he is not a threat to the security of our operations.
A copy of this cable included a handwritten notation to: "Press this
very hard it is not a good thing." CATF Chief Fiers says in his written
response to OIG questions that the notation is his. CATF Nicaraguan
Operations Group (NOG) Chief states that Fiers remained knowledgeable of the
Hyde issue and made sure it was taken care of properly.
A CIA officer recalls that it was not standard practice at the time to
conduct traces concerning individuals or companies that were overtly supplying
commercial services to CIA. He remembers receiving "mixed signals"
from Headquarters in regard to the relationship with Hyde There was a lot of
pressure from Fiers and DCI Casey to get the "job done," as he
recalls, but there were also low level Agency "functionaries" who were
mainly concerned with following procedures. These people "were playing to
an audience," the officer adds, wanting to make sure the Agency would be
protected in case the congressional intelligence oversight committees "came
calling." A former senior logistics officer recalls that it was
not unusual at that time for Headquarters to tell the field to do something and
then act surprised when it was done.
A CIA officer, whose component coordinated logistical support to the
Contra program in the 1980s, says that it was Agency policy to run traces with
other agencies regarding foreign contractors. She says Hyde was involved in an
operation, there was derogatory information about him, and there was a need to
make sure that everything was done right. She recalls that Fiers was constantly
saying that "we need to know everything about this guy and getting [sic]
A July 11, 1987 reply to the July 9 cable from Headquarters ordering no
expansion of the arrangements with Hyde warned that to:
. . . pursue other alternatives at this time . . . could have an obvious
backlash from Mariscos Hybur . . . . A literal interpretation [of the
Headquarters order] will bring the . . . effort to a halt
A July 14, 1987 Headquarters cable advised that--even if the
allegations against Hyde were to be favorably resolved--questioning of him still
would be required concerning issues related to illegal drugs and arms
trafficking. Headquarters concluded this cable by pointing out that "there
is a very real risk that news of our relationship with subject, whose reputation
as an alleged drug smuggler is widely known to various agencies, will hit the
public domain--something that could bring our program to a full stop."
On July 22, 1987, a Headquarters cable stated that:
. . . the DDO [George] received the following directive from DDCI Gates
in April of this year. "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." This directive and our consistent policy of avoiding use
of individuals who have links to drug smuggling has served CIA well. We have
been able to deny involvement with individuals and organizations accused of drug
smuggling. We have initiated priority traces with several other U.S. Government
agencies and departments to get the full story on Hyde and Mariscos Hybur. At
this point, preliminary information . . . is not encouraging.
CIA personnel in the field were again directed in the July 22 cable to look
for alternative logistical means.
A CIA officer in the field says that there was never any
misunderstanding on the drug issue. No one wanted to become involved with
narcotics traffickers, and everyone was keenly aware that Congress would end the
Contra program were the Agency so involved. At the same time, he asserts that
there was nothing solid concerning Hyde, nothing that could be regarded as hard
evidence. "If these allegations were true, DEA and the Coast Guard would
have got him," the officer notes.
The former senior logistics officer states that he never believed the
drug allegations against Hyde, whom he came to regard as a close friend.
However, he allows that Hyde had 35 vessels at sea and it might have been
possible for an employee of Hyde to use one of the boats for smuggling. He
speculates that there were a lot of people in Honduras, including Honduran
Government officials, who were jealous of Hyde and may have been the source of
the drug trafficking allegations. The officer says that he was totally focused
on getting the job done. After hearing the rumors, he discussed them and
considered them with his supervisor, with the two of them taking "due care
given the circumstances."
A July 18, 1987, cable to Headquarters opposed the questioning of Hyde
by CIA Security that had been suggested in the July 14 Headquarters cable. The
relationship with Hyde, the cable asserted, was "an overt, commercial
transaction of short duration" similar to other commercial dealings CIA
had, and it would be inappropriate to conduct an in-depth security questioning.
The cable proposed to use Mariscos Hybur until the estimated project completion
in less than two months because there was no alternative. Should Mariscos Hybur
turn out to be the only viable long-term option, the Base added, it would then "reconsider"
approaching Hyde to submit to questioning.
On July 20, 1987, DEA responded to the July 10 CIA trace request and
reported no derogatory information other than an October 1983 report alleging
Hyde's involvement in cocaine smuggling. On August 20, Customs
reported no derogatory information on Hyde. A July 20 cable to Headquarters
reported that Honduran Government files reportedly contained no derogatory
information on Hyde, but noted that the Hondurans suspected Hyde of drug
trafficking and of bribing Honduran officials to escape prosecution.
On July 27, 1987, OGC attorney W. George Jameson, then-Counsel to the
DO, provided Fiers with a legal opinion regarding the use of Hyde:
I see no legal impediment to proceeding as planned. Neither the firm,
nor its owner, Alan Hyde, is under indictment or investigation to your
knowledge, and the allegations of drug trafficking are not substantiated.
Moreover, you have no independent basis to believe the accusations are true, and
intend to take steps to ensure no possibility of trafficking occurs in the
course of carrying out the terms of the contract . . . . Obviously, CIA use of
a known drug smuggler would raise significant legal and policy implications.
When Congress authorized a Nicaraguan paramilitary program, it prohibited the
assistance it authorized from being provided to "any group that retains in
its ranks any individual who has been found to engage in . . . drug
smuggling." Although not directly applicable to the situation at hand,
I think the analogy is instructive and sets a reasonable standard on which to
determine how to proceed. It does not appear to me from the information you have
provided that this standard has been met.
Jameson says that he was unaware in July 1987 when he authored the
legal opinion to Fiers of the April 9, 1987 ADCI Gates memorandum prohibiting
Agency use of known or suspected narcotics traffickers unless the allegations
were cleared up. He states that his memorandum addressed only the legal issues,
not operational or policy considerations. The Gates directive, he asserts, was
a policy statement. Had he been aware of the Gates memorandum, Jameson says he
would not have interpreted it to mean that Hyde could not be used, but that the
Agency should do its best to obtain more information. In this regard, he says
his own memorandum made clear that CATF needed to dig further into the
allegations by checking with law enforcement agencies or with assets to
determine whether these were reasonable allegations or unfounded. He was
warning CATF to be careful. Jameson also says it should not be
assumed or implied that he was aware of all that the Agency knew about Hyde at
On August 5, 1987, Fiers sent a memorandum to DDO Clair George
recommending that George approve the use of Hyde. The memorandum summarized all
of the available derogatory information and acknowledged that Hyde was "not
attractive and is the type of activity [sic] we wish to avoid."
Fiers added, however, that the Agency had no choice but to use Hyde on the
grounds of "operational necessity." The Fiers memorandum explained
that there would be controls on Hyde that "should minimize the risks."
The contract would not require him to do business in or enter the United
States. Fiers concluded the memorandum by noting that the Agency had shared the
derogatory information regarding Hyde with the FBI, U.S. Customs Service, DEA,
and staff members of both congressional oversight committees and had informed
them of CIA's intent to use Hyde for a limited commercial contract. The
congressional staff members, Fiers reported to DDO George, had posed no
objections to the limited use of Hyde.
Headquarters, in a cable dated August 8, 1987, stated that DDO George
had approved the use of Hyde and Mariscos Hybur to provide logistical services
to complete a project, after which all contacts must cease. A March
31, 1988 CATF memorandum to DDCI Gates also indicated that the decision to use
Hyde and Mariscos Hybur was "made at the DDCI level." A CIA officer
stated in a February 2, 1988 memorandum to the Chief of SAS that "The
decision was made at the DDCI level to go ahead and use [Mariscos Hybur]."
Then-DDCI Gates says that he has no recollection of approving the use
of Hyde and does not recall the matter being brought to his attention.
Gates recalls that he started "putting everything in
writing--especially if it had to do with the Contras" because he had been "savaged"
several months earlier in DCI confirmation hearings for not being aggressive
enough in looking into the Contra program. He also says he almost certainly
would have discussed any such approval with DCI Webster since the congressional
Iran-Contra hearings were underway and Webster was conducting his own inquiry
into CIA's role.
Then-CATF Compliance Officer Louis Dupart asserts that Gates did in
fact approve the use of Hyde. As he recalls, DDO George went to Gates saying, "We
need to use him, but we also need to figure out how to get rid of him."
Gates, according to Dupart, gave the approval, with the caveat that CATF end the
relationship with Hyde as soon as possible. This was all done verbally, nothing
was in writing, Dupart says, since "Gates would not put something like that
in writing." The approval may have been attributed to DDO George in the
August 8 cable, says Dupart, but it was run through Gates. The DDO did not do
it on his own, Dupart says.
Fiers states in his written response to OIG questions that:
My belief is that Acting DCI [Gates] approved [Hyde's] use in a
conversation with me. (I do not specifically recall a conversation in this
regard, but I do believe one took place.) I also recall that the subject was
highly controversial. I specifically recall that Headquarters--me included--did
not want to use Alan Hyde. . . . After much discussion, I recall that we agreed
that he could be used on a highly restricted basis, which essentially eliminated
the possibility that he could use the . . . . operation in connection with any
In a September 29, 1987 cable, CATF requested a determination as to
whether there was any substance to recent allegations that the "criminal
families" on Roatan, including Alan Hyde, were stealing arms and ammunition
destined for the Contras. Further, CATF directed that an appropriate person
should travel to Roatan to attempt to buy weapons if there were substance to the
charges. When asked why CATF did not take similar actions to verify
the narcotics trafficking allegations against Hyde, the former Chief of NOG says
"It was an issue of relative order of priorities . . . . [T]he issue of
stealing our guns had a higher priority than verifying whether Hyde was
smuggling cocaine into the U.S." Fiers states in his written
response to OIG questions that he has "no recollection of Hyde being
involved in gun smuggling. No information has been found to indicate
that the instructions regarding the alleged arms thefts were executed.
A November 9, 1987 cable informed Headquarters that Hyde had consented
to being questioned by CIA Security. A CIA officer speculates that
Hyde may have thought the request to take the test had something to do with the
weapons that were showing up on Roatan. He notes that Hyde was concerned that
this contraband would hurt the local community, and he did not want to be
associated with this.
No information has been found to indicate that CATF responded to the
November 9 cable indicating that Hyde was prepared to be questioned by CIA
Security or that any interview was ever conducted with Hyde. A former CATF
officer does not recall why Hyde was never questioned, but notes that no
interview was "required" since Hyde was used in a limited capacity as
On February 2, 1988, a CIA officer sent a memorandum expressing his
misgivings about CIA's involvement with Hyde. He concluded the memorandum by
stating his belief that "consideration should be given to [not] having any
further involvement with the HYBUR [sic] organization."
No information has been found to indicate that any action was taken in response
to the memorandum.
On February 19, 1988, the Defense Attaché in Tegucigalpa
reported in a cable received by CIA that the Honduran military would be
increasing coastal patrols in the Bay Islands because of concerns about drugs
and arms smuggling. On February 24, 1988, a CIA officer sent a
handwritten note to the CATF SOG Chief informing him of a conversation she had
on that day with Dupart regarding the need to obtain additional approvals to use
Hyde's facilities. The note stated that she also informed Dupart of the planned
Honduran Government "drug-busting effort" against the Bay Islands.
The note went on to say that "Because Hyde is reported . . . as the
'godfather of all criminal activities'--[especially] drug smuggling--in the
Islands, it is likely he will be a target of this effort."
CIA records indicate that the Agency continued to believe that Hyde's
docking and storage facilities on Roatan would be needed to comply with the
congressional mandate to keep in mothball status all equipment, aircraft,
vessels, and supplies that had been used to support the Contras, pending
authorization to continue the Nicaragua program. With these requirements in
mind, the Acting LA Division Chief informed DDO Stolz in a March 9, 1988
memorandum that the Agency would have to lease additional storage facilities
from Hyde. The memorandum also provided Stolz with the most recent derogatory
information concerning Hyde, citing the allegations that a Hyde vessel was being
used for drug smuggling and that Hyde was the head of an air smuggling ring with
contacts in the Tampa/St. Petersburg area. The memorandum pointed out, however,
that there was still no "hard evidence" against Hyde.
On March 12, 1988 an extension of the Agency's contract with Hyde was
approved by DDO Stolz. The extended contract was modified to allow use of
Hyde's storage facilities on Roatan as long as the mothballing of Contra support
assets was required. Other arrangements with Hyde would require prior
Headquarters approval, according to the cable.
Despite this March 1988 extension of the contractual relationship with
Hyde, Agency records indicate that CATF was determined to terminate the
relationship by June 1988 because of the receipt of continuing allegations of
Hyde's involvement in cocaine trafficking and the pending expiration of the
so-called mothball authorities on September 30. A June 29, 1988, CATF cable
noted Headquarters "wishes" to limit any further contact with Hyde and
directed CIA officers in the field to find another commercial firm.
The field again objected to severing ties to Hyde in a July 11, 1988 cable to
Headquarters describing Hyde as being the only Honduran "delivery mechanism"
for aviation gas. Field officers also reportedly believed that Honduran
authorities would not allow another company to do business at the site.
CATF replied in a July 29 cable that an alternative to Hyde "must"
be found and informed the field that there would be no further Agency contact
with Hyde even if the mothball authorities were extended. On
September 22, however, the field requested permission to use Hyde's facility
until the end of the hurricane season. In an October 27 memorandum,
LA Division Chief requested Stolz' approval to continue the use of the Hyde
facility until December 1998. CIA records indicate that Stolz approved
the continued use on October 28, 1988 and that the Agency's relationship with
Hyde apparently ended at the beginning of 1989.
A March 11, 1993 cable discouraged counternarcotics efforts against
Alan Hyde because "his connection to [CIA] is well documented and could
prove difficult in the prosecution stage."
Information Sharing with Other U.S. Government Entities. According
to the October 9, 1987 cable that cited a Honduran report linking Hyde to drug
trafficking, that information was shared with the DEA office in Honduras and the
U.S. Consul General there "in his capacity as mission narcotics referent."
Fiers' August 5, 1987 memorandum to DDO George indicated that the
Agency had informed the FBI, DEA and Customs of its intention to use Hyde for a
limited commercial contract. No information has been found to
confirm the statement that the Agency actually informed these law enforcement
agencies of its intention to use Hyde.
An undated memorandum from Fiers to the ADDO and the LA Division Chief
appears to have been written following a CATF briefing to the SSCI and HPSCI
Staffs concerning Contra drug trafficking allegations in late July 1987. The
memorandum indicated that Fiers had included information about Hyde in his
briefing to several SSCI and HPSCI Staff members. According to the memorandum,
David Holliday of the SSCI Staff had seen "no problems in using Hyde in the
manner outlined [i.e., contracting with him to haul cargo]." The
memorandum recorded, however, that Holliday said he wanted to discuss the matter
with SSCI Chairman Boren before giving "final concurrence."
The Fiers memorandum also noted that Thomas Latimer of the HPSCI Staff "was
more forward leaning. He saw no problems and indicated we should proceed."
Fiers indicated in the memorandum that he would contact Holliday during the
following week to determine whether he had talked to Senator Boren.
No information has been found to indicate a follow-up conversation between Fiers
and Holliday concerning Senator Boren's views.
An August 3, 1987 OCA MFR by Robert 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 Alan Hyde in the Contra supply program in light of
allegations of drug-related activities by Hyde. The MFR indicated that Fiers
was contacted by telephone during the meeting and reportedly stated that Agency
policy was that persons such as Hyde could be used in the Contra program if
there were no ongoing investigations of wrongdoing or no outstanding indictments.
On August 7, 1987, a memorandum from Alvin Dorn, the then-Deputy
Director for Senate Affairs in OCA indicated that SSCI Staff Director Sven
Holmes had been provided background information concerning Hyde, but wanted
more. Holmes was reportedly also requesting information regarding Agency
policies that governed operational use by CIA of persons with criminal
backgrounds. A draft response to Holmes was completed by August 13
that stated, in part:
. . . should the need . . . arise an assessment is made to determine
whether the specifics of the criminal history or notoriety of the person is
compatible with contemplated use; if there is an unacceptable degree of
incompatibility, the individual is not used . . . . It [is] generally
inadvisable to involve anyone in operational activities who is known to
currently be pursuing a criminal activity that is subject to U.S. process.
No information has been found to indicate whether this draft response was
ever made final or sent to the SSCI.
An unsigned August 19, 1987 memorandum virtually restated verbatim the
information in the memorandum Fiers had forwarded to DDO George on August 5.
This memorandum contained a full exposition of the derogatory information
concerning Hyde. No information has been found to indicate whether this
document was provided to Holmes or anyone else.
The Acting LA Division Chief's March 8, 1988 memorandum to DDO Stolz
indicated that the SSCI and HPSCI would be briefed concerning the Agency's plans
to extend the Hyde contract. No information has been found to
indicate that these briefings took place.
The Acting LA Division Chief requested guidance from DDO Stolz in a
March 9, 1988 memorandum regarding whether to inform law enforcement agencies of the extension of the Hyde contract. No
information has been found to indicate any response or decision regarding this
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
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 later canceled.
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
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 the pilot.
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 this information.
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
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
He was hired on June 25, 1987 as a pilot for the Contra program with
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 possible."
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
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. Government agencies.
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 CIA Security.
No information has been found to indicate that information regarding
drug trafficking by the pilot was provided to Congress or to other U.S.
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.
Vortex/Universal employees. The seven individuals identified
through DEA and Customs trace responses as suspected drug traffickers who were
employed by Vortex/Universal were:
Martin H. Gomez
Martin Alberto Gomez
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
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 May.)
. . . .
DonaldoFrixone. 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 1980.
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. Government agencies.
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 1989."
No information has been found to indicate that information regarding
drug trafficking by Gomez was provided to the Congress or to other U.S.
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
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.
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
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
There have been three main sources of allegations of drug trafficking at
Ilopangoa U.S. citizen, Celerino Castillo 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. . . .
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
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
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 Marcos Aguado.
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 in Brazil.
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.
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
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
. . . .
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 officer].
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 do so."
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, 1989 cable.
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
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
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
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," he says.
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. 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
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 activity.
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.
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 subject.
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 strips.
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
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 Bush.
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 with it.
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. 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
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 resistance.
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
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; and
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
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
The Memorandum also concluded that, if Contra organizations had
unwittingly received donations from sympathizers who derived the funds from drug
. . . 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
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
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
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
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 Agencies.
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 to Morales.
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
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
After Morales' appearance before theSFRC 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
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
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
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 Alan Hyde in the Contra supply program in light of allegations of
drug-related activities by Hyde. The MFR indicated that Fiers was contacted by
telephone during the meeting and reportedly stated that Agency policy was that
persons such as Hyde could be used in the Contra program if there were no
ongoing investigations of wrongdoing or no outstanding indictments.
AnOctober 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
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 you wish.
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 says:
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 four years.
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
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] Hull."
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
(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
I agree that it would be prudent to adviseHPSCI 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 about.
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 time.
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
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
. . . .
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 field stations.