PIRATE NEWS - SEPTEMBER 911 SURPRISE: Top Secret Pentagon Papers detail US military plans to wage terrorism on US citizens in USA and blame a foreign nation to start war. US plans included hijacking, bombing and crashing US airliners via remote control, killing innocent US citizens, and US soldiers attacking and killing US soldiers. Pentagon report declassified in 2001 and "quietly" reported by ABC.com and other news outlets. Evil warplan required media deception and public ignorance to succeed.


Edited by John Lee

Distributed for research and educational purposes per 17 USC 107

Mainly law regarding suing city governments under RICO for its frivoulous civil actions to prosecute so-called parking tickets and its unconstitutional parking meters. This conspiracy is the foundation for the car-theft industry



35 volumes of US Senate hearings re Iran-Contra can be found at UT Law Library. Another 35 volumes of US House hearings are still classified Top Secret


"A little sunlight is the best disinfectant." --U.S. Supreme Court Justice Louis Brandeis

And Ye shall know the Truth,
And the Truth shall set you free!
--St. John the Gospel

Ye shall know the truth,
And the truth shall make you angry.
Aldous Huxley



COMMENT | May 7, 2001

Bush's Contra Buddies


The current President George Bush, whose very name evokes a dark era many would prefer to forget, seems determined to resurrect the ghosts of America's scandal-ridden past. A number of his foreign policy appointments are former Iran-contra operatives who are being rehabilitated and rewarded with powerful foreign policy posts.

John Negroponte's nomination to be US ambassador to the United Nations is a case in point. Bush has named him to represent the United States at an institution built on principles that include nonintervention, international law and human rights. Qualifications for the job: Negroponte was a central player in a bloody paramilitary war that flagrantly violated those principles and was repeatedly denounced by the institution in which he would now serve. As ambassador to Honduras from 1981 to 1985, Negroponte was the acknowledged "boss" of the early covert contra operations; he also acted as a proconsul, working closely with the Honduran military commander, whose forces aided the covert war while his embassy consistently denied or misrepresented politically inconvenient evidence of atrocities and abuse.

The nomination of Otto Reich to be Assistant Secretary of State for the Western Hemisphere is even more offensive to international and domestic principles. A longtime anti-Castro Cuban-American, Reich is backed by Senator Jesse Helms and the hard-line exile groups that want political payback for giving Bush his real or imagined margin of victory in Florida.

Like Negroponte, Reich was a key player in the illicit contra war. In 1983 a CIA propaganda specialist named Walter Raymond handpicked Reich to head the new and innocuous-sounding Office of Public Diplomacy. Housed in the State Department, Reich's office actually answered directly to Raymond and to Oliver North in the White House. A General Accounting Office review showed that Reich's office repeatedly provided sole source contracts to other members of North's network, including those involved in illegal fundraising for arms. More important, a Comptroller General's review concluded that Reich's office had "engaged in prohibited, covert propaganda activities designed to influence the media and the public."

Among those activities, as revealed in declassified records, were "white propaganda" operations--having contractors plant articles in the press or influence print and TV coverage while hiding their government connection--and using US military psychological warfare personnel to engage in, as Reich put it, "persuasive communications" intended to influence public opinion.

Reich himself engaged in a crude form of "persuasive communications," personally berating media executives and harassing reporters if news coverage was not favorable to the Reagan Administration's position. When NPR's All Things Considered ran the first major investigative report on contra human rights atrocities, Reich demanded a meeting with its editors, producers and reporters, at which he informed them that his office was "monitoring" all their programs and that he considered NPR to be biased against the contras and US policy. A Washington Post stringer remembers that after a contentious briefing from Reich in Managua in which the stringer and a reporter from Newsweek questioned the truthfulness of the Administration's assertions, an article appeared in a right-wing newsletter put out by Accuracy in Media calling him a "johnny sandinista" and falsely asserting that the Nicaraguan government was providing the two reporters with prostitutes. Reich's office, the then-US Ambassador to Managua told the Post reporter, was responsible for the rumors.

Reich's role as a revolving-door lobbyist is also likely to be a factor in his nomination hearings. As a partner in the Brock Group, a lobbying firm that according to Justice Department records represented the anti-Castro liquor giant Bacardi, Reich advised Jesse Helms's office on the drafting of the Helms-Burton legislation, which tightens the embargo against Cuba. Since passage of the law in 1996, Reich's own lobbying firm, RMA International, has received $600,000 in payments from Bacardi. Another Reich organization, the US-Cuba Business Council, has received more than $520,000 in US Agency for International Development money for anti-Castro work supporting the goals of the Helms-Burton law. If he's confirmed, Reich would become the key policy-maker interpreting and implementing legislation on Cuba, which he was handsomely paid to promote--a clear conflict of interest.

Reich's only diplomatic credential is his 1986 posting as Ambassador to Venezuela, to which officials in Caracas repeatedly objected. While there, Reich became responsible for the case of notorious terrorist Orlando Bosch, jailed in Caracas on charges of masterminding the bombing of an Air Cubana flight that killed seventy-three people in 1976. In September 1987 Bosch wrote a letter in which he thanked the ambassador as "compatriot Otto Reich" for support--a letter that, after it became public, Reich described in a cable to Washington as "a case of Cuban-Soviet disinformation." When a Venezuelan court ruled that Bosch should be released in late 1987, Reich sent a short "Clearance Response" cable to the State Department's visa office--apparently a request for Bosch to enter the United States. Bosch subsequently entered the United States illegally and was detained on parole violation charges related to terrorism and threatened with deportation because, according to the Justice Department, he had "repeatedly expressed and demonstrated a willingness to cause indiscriminate injury and death." Reich's nomination hearings will provide the first public forum for him to explain the purpose of his "clearance" cable and what role, if any, he played in the first Bush Administration's clearly political decision to drop charges against Bosch and allow him to stay in Florida.

Negroponte has already survived confirmation hearings for two ambassadorships since the Iran/contra scandal and is unlikely to face significant opposition, but Democrats say they are drawing the line at Reich. Senators John Kerry and Christopher Dodd are leading the opposition to Reich on the grounds of his "questionable history." According to Senate aides, opponents plan to put a "hold" on the nomination--a tactic perfected by Helms against Clinton appointments--which will provide time for an investigation, access to classified records and organization of support from farm belt Republicans who understand that Reich's hard-line policy on the trade embargo against Cuba will hurt agricultural interests in their states. The political effort to line up votes against Reich and to seek full disclosure of documents on his public diplomacy operations, ambassadorship and corporate lobbying will begin in earnest after the Senate returns from Easter recess.

In a campaign reminiscent of the successful effort twenty years ago to block Reagan's anti-human rights appointee Ernest Lefever to be Assistant Secretary of State for Human Rights and Humanitarian Affairs, the Center for International Policy, the Institute for Policy Studies and the Washington Office on Latin America, among others, are mobilizing to stop the nomination and are confident they can win. "With so much muck connected to his name and his past," suggests CIP director William Goodfellow, "Reich is an inviting target to show that the Democrats are not dead."

Indeed, failure to block Reich could open the door to ever more noxious foreign policy appointees. Senator Helms's top aide, Roger Noriega, is Bush's lead candidate to be ambassador to the Organization of American States. And at least one conservative religious group is touting pardoned Iran/contra criminal Elliott Abrams as a nominee for a human rights post--ambassador at large for international religious freedom.

2001 The Nation Company, L.P.


George Bush: The Unauthorized Biography

by Webster G. Tarpley & Anton Chaitkin

Chapter -XVIII- Iran- Contra

We cannot provide here a complete overview of the Iran-Contra affair. We shall attempt, rather, to give an account of George
Bush's decisive, central role in those events, which occurred during his vice-presidency and spilled over into his presidency.

Capital Research Center

Christic Institute
Contact Information

Address:  P.O. Box 845
Malibu, CA 90265



Tax Status:



Staff Members

Mr. Daniel Sheehan, President
Board Members

"Christic Institute is an interfaith center for law and national policy in the public interest. We commit our resources to legal investigations carefully selected for their potential to advance human rights, social justice, and personal freedom--at home and abroad."

Works to "connect religious principles to public policy."

Initiated litigation in the Karen Silkwood and Greensboro, North Carolina cases; gained a Supreme Court victory in the Silkwood case. (Karen Silkwood "died mysteriously in 1974 after threatening to expose unsafe conditions at the Kerr McGee nuclear plant in Oklahoma. The Greensboro incident "occurred during an anti-Klan protest in November, 1979 when four protesters were killed and nine injured in an attack that was alleged to have been aided by police.")

Conducted litigation to "protect the public from radiation exposure in the process of the Three Mile Island reactor cleanup."

Sponsors the Nuclear Reform Project "to assist local governments in protecting citizens from radiation hazards."

Researches "theological underpinnings of public policy concerning nuclear weapons and energy and peace economics."

Is conducting "a major study of the national security state, with special attention to escalating increases in military expenditures and reductions in civil liberties."

Published Cover Up, In Contempt of Congress, Inside the Shadow Government, The Killing of Karen Silkwood, La Penca on Trial, and La Penca Report.

National Director Sara Nelson has served as chair of the National Organization for Women's labor committee and director of both the Karen Silkwood Fund and the Greensboro Civil Rights Fund. She cofounfed Community Access Television, Inc. of California and served as codirector of American Documentary Films in New York and San Francisco.




Editor's Note: The following lengthy text is a transcript of a speech given in late 1986 by Daniel Sheehan, chief counsel for the Christic Institute, a public interest law and policy center in Washington D.C. Sheehan gained an impressive measure of notoriety in the late 1980s with his lawsuit against "The Secret Team," the group of former and current military men and intelligence agents who, Sheehan alleged, are responsible for a continuing pattern of corruption and violence that dates back at least to the JFK assasination, and further, to World War II--and in the '80s manifested itself in the Iran-Contra Affair.



1.The Politics of Heroin by Alfred W. McCoy (1972, 1991)
Lawrence Hill Books - ISBN 1-55652-125-1

2.Cocaine Politics by Peter Dale Scott & Johnathan Marshall (1991)
U.C. Press - ISBN 0-520-07781-4

3.The Iran-Contra Connection by Scott, Marshall, and Hunter (1987)
South End Press - ISBN 0-89608-291-1

4.The Big White Lie by Mike Levine (1993)
Thunder's Mouth Press - ISBN 1-56025-064

5.Compromised by Terry Reed (1995)
Penmarin Books - ISBN 1-883955-02-5

6.Powder Burns by Clerino Castillo (1994)
Mosaic Press - ISBN 0-88962-578-6

7.The Underground Empire by James Mills (1974, 1978)
Doubleday - ISBN 0-385-17535-3

8.Inside The Shadow Government by the Christic Institute (1987)
Declaration of Plantiff's Counsel Filed by the Christic Institute -
U.S. District Court, Miami, FL.

9.Kiss The Boys Goodbye by Monika Jensen-Stevenson and Wm
Stevenson (1990)
Dutton - ISBN 0-525-24934-6

10.Defrauding America by Rodney Stich (1994)
Diablo Western Press - ISBN 0-932438-08-3

11.Desperados: Latin Drug Lords, U.S. Lawmen, and the War America Can't Win
by Elaine Shannon (1988)
Viking Press


Almost all of these books are available by mail or phone order from:
(805) 899-3433


CIA Report on Contras and Cocaine

NameBase index of the CIA report, Volume II, and repost of articles regarding it from the Washington Post and the New York Times

This report is available from PIR as hitz.zip (547,075 bytes)

From the annotation in NameBase:

Central Intelligence Agency. Allegations of Connections Between CIA and the Contras in Cocaine Trafficking to the United States. 96-0143-IG. Volume II: The Contra Story. Issued on 1998-04-27 as a classified report, and 1998-10 in declassified form. 236 pages. (This page count depends on the printout; the report itself uses paragraph or item numbers instead. NameBase also used these, resulting in numbers from 1 to 1148, new numbers for appendices A to E, and again for graphical reproductions of documents in G1 to G14.)

In August 1996, Gary Webb and the San Jose Mercury News sparked a frenzy about the CIA's role in 1980s cocaine trafficking in Los Angeles. After the New York Times, Los Angeles Times, and Washington Post savaged Webb's story in three-part harmony, the Mercury News caved and Webb was out of a job. Four so-called "investigations" were launched on the issue of CIA, contras, and cocaine: two by Congress, one by Justice, and one by the CIA's then-Inspector General, Frederick Hitz. Two years later, it looked like a fizzle. Then Volume II of the Hitz report was posted on the web, and quite unexpectedly, it was full of names. Hitz lacked subpoena power, but he had a 17-person team dig out old CIA records. This report reviews the record of CIA message traffic, letters, and documents. There are no stunning conclusions, merely an overwhelming impression for anyone who reads it: CIA consistently dropped the ball on this issue, and rarely ran with it to begin with, except to neutralize external pressure. Their only concern was the contra war effort, and everything else took a back seat.

NameBase index

NOTE: This index refers to item or paragraph numbers in the CIA's report. The index was compiled by PIR, not by the CIA. To retrieve an item or paragraph, use this guide to see how the item numbers are distributed among the various sections of the report.


Moves to close US civil rights centre

By Andy Lang

WASHINGTON, D.C. -- For the first time since the McCarthy era, the federal government may attempt to seize the property of a civil rights organisation.

Officials of other public-interest groups warn that the threatened government action against the Christic Institute -- a liberal civil rights law centre -- could establish a dangerous precedent that will block future civil lawsuits against the abuse of power by government agencies or private corporations.

The institute has won several landmark civil lawsuits, including the "Greensboro massacre" case against members of the American Nazi Party and Ku Klux Klan who assassinated demonstrators in 1979, and the "Silkwood" case against the nuclear industry. The institute does not charge legal fees and depends entirely on contributions from churches, Jewish philanthropies, private foundations and individual supporters.

Massive financial penalties have been ordered against the institute by a federal judge who blocked a politically controversial lawsuit four days before the trial was scheduled to begin.

The institute has already paid a $1.2 million punitive sanction imposed by a judge who ruled that a 1986 lawsuit filed by the institute was "frivolous". The suit, Avirgan v Hull, exposed 29 key figures in the Iran-contra scandal six months before the operation was officially acknowledged by the Reagan administration.

Now the institute faces additional penalties. In February, three judges of the federal appeals court in Atlanta, ruling that the institute's attempt to appeal the original sanctions order was also "frivolous", imposed new sanctions. The new fine may be fixed at $400,000.

This is the largest financial penalty imposed on a public-interest law organisation. According to the US Judicial Conference, the average federal sanctions order is $4000.

In a related development, the Internal Revenue Service may soon act on the recommendation of a regional office to revoke the institute's classification as a tax-exempt organisation. The sole basis of the IRS opinion appears to be the sanctions imposed in the Avirgan case.

The Bush administration began to investigate the institute last year after a postcard campaign organised by the Avirgan defendants demanded that the IRS move against the public-interest law centre. A group of 24 conservative members of Congress also pressured the IRS to strip the institute's tax-exempt classification.

This article was posted on the Green Left Weekly Home Page. For further details regarding subscriptions and correspondence please contact greenleft@peg.apc.org



by Chip Berlet, Political Research Associates

Rightist Influences on the Christic Institute Theories

The problem of conflating documentable facts with analysis and conclusions and then merging them with unsubstantiated conspiracy theories popular on the far right has plagued progressive foreign policy critiques for several years. The Christic Institute's "Secret Team" theory is perhaps the most widespread example of the phenomenon. While many of the charges raised by Christic regarding the La Penca bombing and the private pro-Contra network are documented, some of their assertions regarding the nature and operations of a long-standing conspiracy of high-level CIA, military, and foreign policy advisors inside the executive branch remain undocumented, and in a few instances, are factually inaccurate.

There are two related questions in this matter. One is whether or not the case was handled properly with regard to the actual clients, Martha Honey and Tony Avirgan. The other is how much unsubstantiated conspiracism was made part of the case and its surrounding publicity. This paper will focus on the issue of the undocumented conspiracy theories.

Some critics of the Christic Institute say undocumented conspiracy theories, perhaps first circulated by the LaRouchians and the Spotlight, were inadvertently drawn into Christic's lawsuit against key figures in the Iran-Contra Scandal. The Christic Institute no longer uses the "Secret Team" slogan, which it employed for the first few years of its Iran-Contra lawsuit, Avirgan v. Hull. The suit, filed in 1986, is also called the La Penca case, after the Nicaraguan town where a 1984 bombing killed three journalists and at least one Contra and wounded dozens, including television camera operator Avirgan and the intended target, Contra leader Eden Pastora. Among the twenty-nine defendants named were retired Generals Richard Secord and John Singlaub, businessman Albert Hakim, Colombian druglord Pablo Escobar, and contra leader Adolfo Calero.

It is arguable that while Christic pursued the broad conspiracy of the "Secret Team" , the bedrock portions of the case involving the actual La Penca incidents took a back seat. A few weeks before the case was slated for trial, the Christic Institute still had not diagramed the elements of proof, a legal procedure where the text of the complaint is broken down into a list of single elements that have to be proven with either valid documentation, a sworn affidavit, or a live witness. This had created problems for researchers and lawyers who had no master list of what needed to be proven when devising questions for depositions and witnesses.

When a special meeting was convened shortly before trial, it turned out that for some of allegations concerning the alleged broad "Secret Team" conspiracy, the only evidence in possession of the Christic Institute was newspaper clippings and excerpts from books--and in a few instances there was no evidence other than uncorroborated assertions collected by researchers.

Raised at the meeting was the issue of whether or not the case had unwittingly incorporated unsubstantiated conspiracy theories from right-wing groups such as the LaRouchians. The staff was warned that some defendants would likely prevail at trial due to lack of court-quality evidence and would then likely pursue financial penalties (called Rule 11 sanctions). <$FThe author attended the meeting and has corroborated these assertions with other persons attending the meeting. The author also is aware that ethical problems are created by reporting even in broad summary the contents of a meeting of a legal team working on a lawsuit. This decision was made only after much thought, discussion, and a failed attempt to carry out private discussions to resolve some of these matters. These matters were first raised by the author internally to Christic staff and leadership in the summer of 1988. Other attempts were made by the author and other persons to have these criticisms dealt with between 1988 and 1990. A final private discussion in the summer of 1991 originally involved the author, Christic client Tony Avirgan, and Christic leadership. It was the Christic Institute's unilateral decision to discontinue that attempt to resolve as many issues as possible privately before the criticisms were made public. The issue is also timely because if Christic refuses to deal with criticism of some of its work in the case, and succeeds in placing the issue of the dismissal before the Supreme Court, the almost-inevitable refusal to reverse the trial judge's decision would take a bad ruling and certify it as the law of the land.>

These matters are important because Christic press statements have fueled the idea, and many Christic Institute supporters believe, that the dismissal of the case was just another example of a massive government conspiracy and cover-up. It is undeniable that the presiding judge was hostile to Christic and stretched judicial discretion to the breaking point in dismissing the case. The dismissal was unfair. However, according to a statement issued by Christic client Tony Avirgan, the Institute must share at least "partial responsibility for the dismissal of the La Penca law suit."

It's sad that these issues have to be raised by `outsiders' such as Berlet. But the truth is that criticism-self criticism, an essential tool in any social movement, has never been tolerated by the leaders of the Christic Institute. Those who criticized the legal work of Sheehan were labeled as enemies and ignored.

There were, indeed, numerous undocumented allegations in the suit, particularly in Sheehan's Affidavit of Fact. As plaintiffs in the suit, Martha Honey and I struggled for years to try to bring the case down to earth, to bringing it away from Sheehan's wild allegations. Over the years, numerous staff lawyers quit over their inability to control Sheehan. We stuck with it--and continued to struggle--because we felt that the issues being raised were important. But this was a law suit, not a political rally, and the hostile judges latched on to the lack of proof and the sloppy legal work.

The case, before it was inflated by Sheehan, was supposed to center on the La Penca bombing. On this, there is a strong body of evidence here in Costa Rica. It is enough evidence to get a reluctant Costa Rican judiciary to indict two CIA operatives, John Hull and Felipe Vidal, for murder and drug trafficking. Unfortunately, little of this evidence was successfully transformed into evidence acceptable to U.S. courts. It was either never submitted or was poorly prepared. In large part, this was because Sheehan was concentrating on his broad, 30-year conspiracy.

The exercise Berlet suggested--breaking each allegation down and compiling evidentiary proof for it--was indeed undertaken by competent lawyers on the Christic Institute staff. But it was an exercise begun too late. The case had already been spiked by Sheehan's Affidavit.

We feel that it is important to openly discuss these things so that similar mistakes are avoided in the future.

The conspiracy Avirgan refers to was spelled out in a two-page circular sent out to promote the sale of the "Affidavit of Daniel P. Sheehan," filed in 1986 and revised in early 1987. The circular began:

For the last 25 years a Secret Team of official and retired U.S. military and CIA officials has conducted covert paramilitary operations and "anti-communist" assassination programs throughout the Third World... The international crimes committed by this group in the name of the United States are at the heart of the Iran-contra scandal.... For a quarter of a century this group has trafficked in drugs, assassinated political enemies, stolen from the U.S. government, armed terrorists, and subverted the will of Congress and the public with hundreds of millions of drug dollars at their disposal. The leaders and chief lieutenants of the Secret Team are defendants in a $17 million civil lawsuit filed in May 1986 by the Christic Institute on behalf of U.S. journalists Martha Honey and Tony Avirgan...

In a thoughtful analysis of the Christic Institute's lawsuit, David Corn observed in the July 2-9, 1988, Nation that the institute "deserves credit. . . for recognizing the Iran-contra scandal and its significance early on." He added: "It has kept the investigative fires burning, sought to hold individuals accountable for their roles in the affair, and probed issues overlooked by the congressional investigating committees (including the contra drug connection and the La Penca bombing. . . )" The institute's "advocacy of the Secret Team theory," on the other hand, struck Corn as a serious flaw. It might be handy for raising money in direct-mail solicitations but it presented problems for people who prefer evidence to rhetoric. (In February, 1993 Avirgan and Honey filed a motion seeking Sheehan's disbarment.)

Jane Hunter of Israeli Foreign Affairs agrees that some of the Christic research is problematic. "As a researcher I have over the years found nothing in the Christic case worth citing," says Hunter. Hunter worries about the rise of conspiracism on the left, including some of the allegations made in the Christic lawsuit. "If you keep looking for all the connections, all you are going to see is something so powerful that there is no way to fight it. We have to look at the system that produces these covert and illegal operations, not who knew so and so three years ago."

Dr. Diana Reynolds is another critic of portions of the Christic thesis. Reynolds, an assistant professor of politics at Bradford College in Massachusetts, thinks undocumented conspiracy theories hurt the Christic case. She believes there is much solid evidence concerning the actual La Penca bombing and aftermath, and some specific Iran-Contra material, but she thinks "it is fair to say that some right-wing conspiracy theories were woven into the theory behind the Christic case." Reynolds read thousands of pages of depositions taken by the Christic Institute while she was researching a story on federal emergency planning, later published in Covert Action Information Bulletin. According to Reynolds:

It is clear to me from the depositions of Ed Wilson and Gene Wheaton that the notion of a broad conspiracy conducted by the so-called Enterprise, beyond the La Penca bombing and the specific Iran-Contra scandal, has many holes. I am thoroughly convinced that those two depositions contain the nub of the unsubstantiated conspiracy theory, and I have said this for a very long time. When we get into the Christic allegations regarding the Middle East and Asia and the Camp David accords and forty years of conspiracy, their thesis falls apart.

Reynolds suggests it is fair to ask whether or not Christic was manipulated by right-wing persons associated with factions in the intelligence community. "It is curious that Wilson is a former intelligence operative, and that Wheaton, at the same time he was working for Christic, was also alleged by Mr. Owen in his Christic deposition to be passing information to Neil Livingston at the National Security Council to protect some of the people who were implicated in the Iran-Contra scandal," says Reynolds. At least two former Christic investigators say they warned Sheehan not to rely on conspiratorial analysis and to be suspicious of material from right-wing sources. Nevertheless, Sheehan was rebuked by his own staff and others in Christic leadership for repeatedly lapsing into an overly conspiratorial analysis in public appearances, and for making claims that the Christic staff could not document or otherwise support when responding to follow-up inquiries by reporters. <$F Interview with two former Christic staff who were eyewitnesses to several of these incidents.>

While the allegation that right-wing conspiracy theories were woven into the case is hotly denied by Christic, the contacts by the LaRouchians during the mid and late 1980's are not disputed. According to a Christic spokesperson:

In conducting investigations historically we have sometimes had to get information from persons with whom one would not normally associate. People like drug dealers, mercenaries and intelligence agents. During our investigation, there were some meetings with LaRouche staffers conducted by Lanny Sinkin and David MacMichael. The information was always viewed very skeptically and none of it found its way into our casework or courtroom materials. All those contacts were stopped by 1989. We take seriously the view that the LaRouche organization is an organization with whom progressives should be very wary.

David MacMichael and Lanny Sinkin are no longer affiliated with the Christic Institute. Sinkin says his contact with the LaRouchians while at Christic was limited to a few brief conversations. MacMichael, a former CIA analyst turned agency critic who now writes and lectures on covert action, has had a more extensive relationship to the LaRouchians. MacMichael and Sinkin, however, were not the only Christic investigators who received information from the LaRouchians. Christic investigator Bill McCoy also received information from the LaRouchians as did at least one other Christic researcher, according to former staffers.

Sheehan was warned by his own staff in 1988 that contacts with the research circles around LaRouche and Liberty Lobby were a problem on both factual and moral grounds. Later Danny Sheehan appeared on the Undercurrents program broadcast on WBAI-FM and other Pacifica and progressive radio stations. Christic told the radio audience that it was untrue that LaRouchians had supplied information to the Christic Institute, and blasted a passing reference to this matter in Dennis King's book, Lyndon LaRouche and the New American Fascism. Shortly after Sheehan's statements, an offer to promote King's book as a premium gift during an annual fundraising drive for the radio station was withdrawn. King believes Sheehan's unequivocal denial undercut the credibility of his book and was responsible for WBAI withdrawing the original offer.


Topic 102


12:13 pm  Oct 12, 1991


Convergence Magazine, Christic Institute, Fall 1991

[Covert operations rely on lliances with drug smugglers. In 1972, Alfred McCoy documented this relationship in his groundbreaking study, _The Politics of Heroin in Souheast Asia_. The C.I.A. attempted to prevent its publication, and it has since disappeared from most libraries. Now a professor of history at the University of Wisconsin, Madison, McCoy has expanded his study to include evidence from cover wars fought on almost every continent. Published by Lawrence Hill Books, to which the Christic Intitute is grateful for permission to reproduce the following excerpt, this revision is titled, The Politics of Heroin: C.I.A. Complicity in the Global Drug Trade. For details on how to order Prof. McCoy's book and other resources on drugs and covert operations, please contact the Institute at the address listed at th end of this article.]

Few in official Washington are willing to discuss the imposition of controls over C.I.A. covert operations to ensure that the United States does not continue to protectdrug lords. Over the past 40 years American and allied intelligence agencies have played a sig- nificant role in protecting and expanding the obal drug traffic. C.I.A. covert operations in key drug-producing areas have repeat- edly restrained or blocked D.E.A. efforts to deal with the problem. [The D.E.A., or Drug Enforcement Administration, is the nation's chief law enorcement agency in the war on drugs.]

The list of governments whose clandestine services have had close relations with major narcotics traffickers is surprisingly long-- Nationalist China, Imperial Japan, Gaullist France, French Indochina, the Kingdom of Thailand, Pakistan and the United States. Instead of reducing or represing the drug supply most clandestine agencies seem to regulate traffic by protecting favored dealers and eliminating their rivals.

Indeed, if we review the hisory of postwar drug traffic, we can see repeated coincidence between C.I.A. covert action assets and major drug dealers. During the 1950s the C.I.A. worked with the Corsican syndicates of Marseilles to restrain communist influence on the city's docks, therebystrengthening the criminal milieu at a time when it was becoming America's leading heroin supplier. Si- multaneously, the C.I.A. installed Nationalist Chinese irregulars in northern Burma and provided them with the logistic support that they used to transform the country's Shan states into the world's largest opium producer.

During the 1960s the C.I.A.'s seret war in Laos required alliances with the Hmong tribe, the country's leading opium growers, and various national political leaders who soon became major heroin manufacturers. Although Burma's increased opium harvest of the 1950s supplied only regional markets, Laos' heroin production in the late 1960s was directed at U.S. troops fighting in South Viet- nam. Constrained by local political realities, the C.I.A. lent its air logistics to opium transport and did little to slow Laotian heroin shipments to South Vietnam.

When U.S. troops withdrew from Vietnam in the early 1970s, South- east Asian heroin followed the GIs home, capturing one-third of the U.S. drug market in the mid-70s. Ater protracted complicity in the marketing of opium and heroin, the C.I.A. emerged from Laos with an entire generation of clandestine cadres experienced in using na cotics to support covert operations.

During the 1980s, the C.I.A.'s two main covert action opeations became interwoven with the global narcotics trade. The agncy's support for Afghan guerrillas through Pakistan coincided wit the emergence of southern Asia as the major heroin supplier for the Eu- ropean and American markes. Although the United States maintained a substantial force of D.E.A. agents in Islamabad dring the 1980s, the unit was restrained by U.S. national security imperatives and did almost nothing to slow Pakistan's booming heroin exports to America.

Similarly, C.I.A. support for the Nicaraguan contras has sparked sustainedlegations, yet unconfirmed, of the agency's complicity in the Caribbean cocaine trade. Significanty, many of the C.I.A. covert warriors named in the contra operation had substantial ex- perience in the Laotian secret war.

Surveying C.I.A. complicity in the narcotics trade over the past four decades produces several conclusions. First, agency alliances with Third World drug brokers have, at several key points, ampli- fied the scle of he global drug traffic, linking new production areas tothe world market. Protected by their C.I.A. allies, these drug brokers have been allowed a de facto immunity from investiga- tio during a critical period of vulnerability while they are forg- ing new market linkages. Of equal importance, the apparent level of C.I.A. complicity has increased, indicating a growing tolerance for narcotics as an informal weapon in the arsenal of covert warfare. Over the past 20years, the C.I.A. has moved from transport of raw opium in the remote areas of Laos to apparent cmplicity in the bulk transport of pure cocaine directly into the United States or the mass manufacture of heroin for the U.S. market. Finally, Ame- rica's drug epidemics have been fueled by narcotics supplied from areas of major C.I.A. operations, while periods of reduced heroin use coincide with the absence of C.I.A. activity.

In effect, American drug policy has been crippled by a contradic- tion between D.E.A. attempts to arrest major traffickers and C.I.A. protection for many of the world's drug lords. This contradicion between covert operations and drug enforcement, seen most recently during Pakistan's heroin boom of he 1980s, has recurred repeat- edly. The C.I.A.'s protected covert action assets have included eille's Corscan criminals, Nationalist Chinese opium warlords, the Thai military's opium overlord, Laotian heroin merchants, Af- ghan heroin manufacturers, and Pakistan's leading drug lords.

Although there are problems in many C.I.A. divisions, complicity with the drug lords seems limited to the agency's covert operation units. In broad terms, the C.I.A. engages in two types of clan- destine work: espionage, the collection of information about pres- ent and future events; and covert action, the attempt to use extralegal means--assassination, destabilization or secret war- fare--to somehow influence the outcome of tose events. In the cold war crisis of 1947, the national security ac that established the C.I.A. contained a single clause allowing the new agency to perform ``other functions and duties'' that thepresident might direct--in effect, creating the legal authority for the C.I.A.'s covert oper- atives to break the law in pursuit of their objectives. From this vague clause has sprung the entir C.I.A. covert action ethos and the radical pragmatism that have encouraged repeated alliances with drug lords over the past four decades.

With the demise of the cold war in 1989-1990, it might now be possible to impose some controls over the C.I.A. A small reform of the national security legislation would close down the C.IA.'s covert action apparatus, which is no longer necessary, without weakening the agency's main intelligence-gathering capabilities. Regulation of the C.I.A.'s covert operations might thus deny soe future drug lord the political protection he needs to flood America with heroin or cocaine.

To order this book or learn more about the Christic Institute, please call us at (202) 7-8106 or write us at the following adress:

Christic Institute
1324 North Capitol Street, N.W.
Washington, D.C. 20002

Andrew Lang
151251507 CHRISTIC
Christic Institute
202-797-806 voice
202-529-0140 BBSuunet!pyramid!cdp!christic
202-462-5138 fax


November 16 & 17, 1990
Shrine Auditorium, Los Angeles, CA

November 16, 1990, Set List: Brilliant Disguise / Darkness On The Edge Of Town / Mansion On The Hill / Reason To Believe / Red Headed Woman / 57 Channels / My Fathers House / 10th Avenue Freeze Out / Atlantic City / Wild Billys Circus Story / Nebraska / When The Lights Go Out / Thunder Road / My Hometown / Real World / Highway 61 Revisited / Across The Borderline

November 17, 1990, Set List: Brilliant Disguise / Darkness On The Edge Of Town / Mansion On The Hill / Reason To Believe / Red Headed Woman / 57 Channels / The Wish / Tougher Than The Rest / 10th Avenue Freeze Out / Soul Driver / State Trooper / Nebraska / When The Lights Go Out / Thunder Road / My Hometown / Real World / Highway 61 Revisited / Across The Borderline

Notes: After almost two years off from performing, not including surprise club gigs, and a year of a lot of personal change (he moved to LA, became a father, and broke up the E Street Band), Bruce agreed to do two acoustic shows for the Christic Institute, a public watchdog agency, with Bonnie Raitt and Jackson Browne. Many, many rumors of Bruce's recording activities circulated in the spring and summer of 1990, and many people wondered if Bruce was going to debut any new songs. Between the two nights, six new songs were played. The first night included the debuts of Red Headed Woman, When The Lights Go Out, 57 Channels, and Real World. Other highlights from this show include a slow version on piano of 10th Avenue Freezeout, Thunder Road (Bruce forgets the words), and My Hometown, as well as the acoustic premiere of Darkness on the Edge of Town. Real World is performed on piano, which most fans prefer to the version later released on Human Touch.

The second show for the Christic Institute featured the premieres of The Wish, a real rarity until the Ghost of Tom Joad Tour and later released on Tracks, and Soul Driver, later released on Human Touch. Bruce also Tougher Than the Rest on piano. When the Lights Go Out is never played again, but is released on Tracks.

Portions of these shows are available on several CDs, including "Springsteen, Raitt, and Browne," "American Dream," Swingin' Pigs' "Acoustic Tales," and "Christic Nights."

According to an article in the Boston Globe a year later, bootleg tapes of these two shows were so good that Landau and Bruce considered releasing portions of these shows.

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Government Corruption

     Chris Griffith's story list. The stories cover scams, the police, corruption, politics, whistleblowing, and more. With a
     "significant" Australian focus.
     The Alliance to Expose Government Corruption and Corporate Crime
     Internet Corruption Ranking - Home Page
     Covert Operations A great expose' Magazine
     Wackenhut Security Corp.: The US's largest rent-a-cop, with many ex-CIA on its Board of Directors, it is implicated in
     many nasties. Awarded contracts by the Kennett Government to manage seve ral Victorian Prisons.
     Covert Action Quarterly
     FAIR-Fairness and Accuracy in Reporting
     The Nation Magazine
     Mother Jones Magazine
     Electronic Frontier Foundation
     Voters Telecom Watch
     Working Assets Long Distance
     Christic Institute - La Penca bombing - "Secret Team"
     Pinknoiz collection
     Deep Politics Bookstore
     The Underground Review
     CPSR-Computer Professionals for Social Responsibility
     Z Magazine - Noam Chomsky
     old Noam Chomsky page
     GovAccess archives Jim Warren's crusade to enhance citizen participation in government through easier/faster access to
     tax-payer funded information and elected representatives
     Internet Corruption Ranking
     Dave Emory-Historian, Researcher, Radio Personality
     WRI-War Resistor's International
     WTR-War Tax Resistance
     Central Intelligence Agency
     Federal Bureau of Investigation
     Drug Enforcement Administration
     Bureau of Alcohol, Tobacco and Firearms
     Corruption, counterinsurgency ... An article about corruption and drugs.
     Sources Journal. A Journal, not really about corruption but rather espionage, but a good one.


CIA drug-running and Clinton

As the powerful Western countries grapple with the extradition of two
suspected bombers from Libya another extradition re-quest has gone almost
entirely without notice in the press. Costa Rica is attempting to bring
back a naturalised citizen of their cou ntry to face justice following a
governmental report into his activities. The man in question, John Hull,
is accused by Costa Rica of murder, drug trafficking and hostile acts
against Nicaragua in violation of their countrys neutrality. John Hull
was a major contra supporter during the U.S.s war against Nicaragua and
is believed to have engineered the bombing of the La Penca press
conference given by Eden Pastora, the only contra leader who had refused
to work under the C.I.A. Five were
 killed in the explosion and twenty injured (though marginally higher and
lower figures have also been put for-ward). Hull was even accused by
Colombian drug kingpin Carlos Lehder on an ABC news program of pumping
about 30 tons of cocaine into the United
 States a year from his ranch in Costa Rica.  It included an airstrip:
just one link in the contra resupply network.  Cocaine-funded covert
operations have a pedigree: the C.I.A. support for opium-growing Chinese
nationalists in the Golden Triangle set the scene for the 60s heroin
plague in the U.S.  As far back as the 50s the C.I.A. had found it
expedient to ally with the Corsican syndicates smuggling drugs through
Marseilles who were able to break the power of the communist dockworkers
there. Further examples would include the Mujaheedin guerrillas, for
instance, and Manuel Noriega, who himself helped organise the rou ting of
drugs to the U.S. and guns to the contras. Since jumping bail in Costa
Rica, Hull has found sanctuary in the U.S., the country where he was born
and also a country professing zero tolerance for drug smugglers. And
even, we are told, a whole war on drugs along with its 'abhorrence of
terrorism' . Hull has told journalists that he will return to Costa Rica
to clear his name and has even been in touch with Amnesty Internation=
to protest about harassment. A number of U.S. Congressmen quickly got in
touch with the Costa Rican President to ask th at he handle Hull's case
"in a manner that will not complicate U.S.-Costa Rican relations." Can we
expect Hull to return to Costa Rica to prove his innocence soon? Not
according to Susie Morgan, a British journalist badly injured in the La
Penca blast: the C.I.A. cannot afford Hull taking the witness stand,
theyd have to kill him. She herself
 gave up chasing Hull after four arduous years of investigation. Others
have tried too and faced blockages and death threats; one
insider-turned-informant was killed on Hulls ranch.=20

The Christic Institute: under attack

The one organisation which looked as if it might be able to put some
pressure on Hull was the Christic Institute - a liberal public interest
law firm which made Hull a defendant, along with twenty-eight others, in a
lawsuit brought by two of the American journalists injured in the La Penca
explosion. The lawsuit charges that a criminal racketeering enterprise
smuggled narcotics and arms through contra bases in Central America,
supplying much of the North American drug market. In the event the
Christic Institute was given the runaround by the judicial system, which
denied them a jury trial, and with the unprecedented -
politically-motivated - removal of their tax-exempt status looming as well
as awards of huge costs and fines totalling $1.7 million against them,
they may soon lie in financial ruins. Leonard Schroeter, chair of the
Association of Trial Lawyers of America, has called the various judicial
sanctions against the Christic Institute the single most unspeakable
attac k on dissent Ive ever seen... It was judicial tyranny. Schroete=
like others, is terrified at the implications: Corporate America is
deter-mined to convert judges into ideo-logues, who follow the
corpor-ations agenda. And part of that agenda is minim ising peoples
capability to have access to justice. Corporate America wants to reduce
the number of lawsuits challenging their practices and abuses by the
federal government... If youre challenging something major, youre
subjecting yourself to severe r isk. The risk of personal bankruptcy. The
risk of being forced out of your profession. Thats the kind of terror
this case has created. Some sympathisers say that the Institute itself
may be partially to blame for casting its net too wide and bringing in so
much insufficiently well-prepared evidence along with superfluous and
sometimes unsourced conspiracy theory that their case became
 too cumbersome.  The Christic Institute has a praiseworthy record of
legal actions in the public interest: it helped with the successful Karen
Silkwood case against Kerr McGee Nuclear Corporation and with a number of
important civil rights cases in southern black communi ties. Now, however,
it may finally have bitten off more than it can chew: the White House, the
C.I.A. and even the Justice Department (who halted the F.B.I.
investigation of contra-linked heroin trafficking). It looks as if it may
fail to live up to the high hopes of its supporters - who include Jesse
Jackson and Bruce Springsteen - through a mixture of inexperience as well
as a generous dose of governmental maliciousness. Hull apparently remains
in hiding in the U.S. - still a free man. The Christic In stitute has
managed, until now at least, to survive after drastic cuts in staff and
activities and the selling-off of buildings, and even then only after a
large donation towards the $1.7 million in fines. There has still been no
direct refusal by the U.S. government to allow the extradition but neither
has there been any sign that Clinton favours extradition; his past
behaviour may give little cause for optimism.=20

Clinton's cocaine cover-up?=20

A small dirt airstrip at Mena, Arkansas, was a major North American focus
for the Contra drug and gun-running network, apparently handling a
night-flight every five minutes, without lights, at the height of the
activities. Democrat Congressman for Arkans as, Bill Alexander, has stated
that activities at Mena have been responsible for large volumes of drugs
coming into his state. In spite of mounting evidence, however, Clinton, as
Governor of the state, appears to have made no attempt to help with
investig ations by local prosecutors into the illegal activities there; he
may even have sat on important evidence which could have helped to bring
into the open these activities, as we shall see. In his defense Clinton
has claimed that he did in fact authorise $2 5,000 for an investigation,
but no trace of such a payment has yet been found. Clinton's behaviour has
led to suspicion in some quarters that he may even have been linked to the
C.I.A. in the past, perhaps receiving their help in obtaining his Rhodes
scholarship as has happened with others. One fellow scholar at the time,
Lt.Col. Ro bert Earl, curiously enough went on to become an assistant to
Oliver North. Clinton is well-known too for sending his state's National
Guard to Honduras for training in what amounted in effect to
Contra-supporting activities. He has honoured prominent con tras, like
Adolfo Calero and his brother as well as a notorious American supporter
Major-General John Singlaub, with "Arkansas Traveller" awards. Clinton had
also employed, in the Arkansas Development and Finance Administration, a
contra-supporter named L arry Nichols, who almost torpedoed his candidacy
later by exposing his affair with Gennifer Flowers during a court case
following Nichols' dismissal from his job. Clinton's brother - who has
been convicted of cocaine possession - is also involved, as a 'hanger-on'
of Barry Seal who was a major organiser of the contra resupply network and
one-time pilot for the Medellin cocaine cartel. An investigation in the
newsletter "Washington Report" concluded that "There is ample evidence
that Bush, Clinton, Pryo r (Senator David Pryor, Democrat-Arkansas),
Bumpers (Senator Dale Bumpers D-AR), Hammerschmidt, various U.S.
attorneys, Arkansas state officials and Arkansas financial institutions
knew plenty about the illegal activities at Mena but permitted these to pr

The Deniable Link

One episode which ought to have brought the Mena activites to the
attention of the public involves Arkansas resident and C.I.A. 'asset'
Terry Reed who found himself framed by Arkansas state officials, including
Clinton's state security chief, Buddy Young,
 when he tried to end his role in assisting covert operations from Mena.
He is currently suing these police officials.  Reed had once worked for
the C.I.A.'s 'Air America' and later, as a family man, still happily
became involved in helping the contra resupply network: he refitted planes
and trained contra pilots at the Mena airstrip. Later he became involved
with Oliver N orth who asked Reed to allow a small plane he owned to be
taken in a faked "theft" so that it could be used by the contra resupply
network. This scam of North's - named "Operation Donation" - enabled him
to circumvent Congressional clampdowns on aid to th e contras whilst plane
and boat-owners would claim the insurance money and lose nothing
themselves. Reed was unhappy about lending the plane, perhaps permanently,
as it was needed for his work and he declined to help. A few weeks later
it was stolen anywa y. Reed says it was a couple of years later, in 1985,
that a friend from his days with Air America - C.I.A. pilot William Cooper
- told him that the plane had actually been taken for Oliver North and
"Project Donation". In mid-1986 Reed accepted the C.I.A.'s offer of a
business opportunity in Mexico in exchange for further help in providing
cover for a Mexican leg of the resupply operation. However, several months
later Reed began to get cold feet after his old friend Wi lliam Cooper was
shot down and killed over Nicaragua. The sole survivor, cargo-kicker
Eugene Hasenfus, was propelled into the media spotlight sparking off the
Iran-Contra investigation. "I told them that this was a grandiose, fun
scheme but I am not going
 to do this anymore... we don't want to hurt you - we just want out. (But)
once you've seen it, you're in", as Reed puts it. It is suggested that he
also stumbled upon a tonne of cocaine in a hanger he used.  His bosses,
then including hardline anti-Castro Cuban Felix Rodriguez, were not
pleased by his refusal to continue his work in Mexico. Before he knew what
had hit him Reed found that his "stolen" plane had been secretly returned
to its hanger and a passin g private investigator just happened to be
walking by this hanger as the wind blew the door open to show the plane.
He soon found himself in court, along with his wife, charged with
insurance fraud. His F.B.I. file now inexplicably described him as "arme d
and dangerous". The initially skeptical Public Defenders appointed to the
case soon changed their minds when they and the Reeds suffered what under
normal circumstances would have been an inexplicable series of violent
incidents including break-ins, fir e-bombing and an apparently deliberate
hit-and-run attack when one of the Defenders' cars was rammed. In the
event Reed was aquitted of insurance fraud perhaps because he had
expressed his wish to sub-poena North and Rodriguez.  Reports on the case
by Buddy Young, Clin-ton's security chief, had been dictated in 1988 and
backdated by a year; the Judge conclud-ed that Young and the private
investigator both had a "reckless dis-regard for the truth". Vital
evidence supporting Reed's
 claims remained in Clinton's mansion way after it should have been handed
over to the court. Reed is currently prosecuting the Arkansas officials
who he believes tried - unsuccessfully - to frame him.=20

Pictures courtesy of Christic Institute: 8733 Venice Boulevard, Los
Angeles, CA 90034 Tel. 010 1 310 287 1556 SELECTED SOURCES: Covert Action
37, The Realist 122, Unclassified Vol. IV No. I, Christic Institute -
Convergence, Summer/Fall/Winter 1991.=20


Anatomy of a Disinformation Campaign

Johan Carlisle

Johan Carlisle is a free-lance journalist based in San Francisco.

The remote jungle shack full of journalists and guerillas exploded suddenly in a murderous flash. The blast from the metal camera case full of C-4 plastique which had been carefully set down in front of Eden Pastora devastated the small group. Seventeen journalists were wounded that evening, May 31, 1984, at La Penca, Nicaragua, and three eventually died. Pastora, the charismatic ex-Sandinista hero, and some of his contra rebels were slightly injured. The wounded journalists were forced to lie unattended in their own blood for hours before everyone was finally evacuated by canoe and jeep to the nearest hospital in nearby Costa Rica--an eight hour trip at best. In the confusion of the understaffed hospital emergency room the bomber slipped away unnoticed and while his cover identity is known, he has never been found.

Over the next few days, American news reports of the bombing and the identity of the bomber varied widely. Most news agencies said the identity of the bomber was unknown and reported the details of the bombing with few speculations about the sponsor of the tragic event. ABC and PBS, in their evening news broadcasts on June 1, held forth with a startling announcement that the bombing was the work of ETA (1) Basque "terrorists" working for Nicaragua's Sandinista government. Here was another example of Reagan's infamous "terrorist internationale" in the news only a few months before the 1984 presidential election.

The ETA story played for about a week until the French authorities said that the alleged Basque terrorist, Jos Miguel Lujua, had been under house arrest in southern France for a number of years. By that time the La Penca bombing had become old news and was forgotten until May of 1986 when the Christic Institute filed a lawsuit against 28 individuals, on behalf of Tony Avirgan, one of the injured journalists, and his journalist-wife, Martha Honey. In the course of investigating the so-called Secret Team (2), it became obvious from new evidence provided by government documents that the ETA story was a carefully planned US government disinformation campaign. The ETA cover story provides a rare opportunity to track the genesis of a covert propaganda operation.

The US government profited greatly from the widespread belief that the Sandinistas were behind the assassination attempt of Eden Pastora at La Penca. Col. North had discussed on several occasions provoking the Costa Ricans into requesting direct US military intervention in the illegal war against Nicaragua. Linking the Nicaraguans with international terrorism played well at home and revived Reagan's wilting bouquet of trumped up rationales for continuing the contra war. Shifting the blame to the Sandinistas for a callous attack on the international journalist community to eliminate the troublesome Pastora (3) hit the Sandinistas coming and going. After the assassination attempt, Eden Pastora faded away as a major player in the Southern Front and members of Col. North's "off the shelf" covert supply network and "Somocista" contras moved in.

The disinformation campaign began in a series of articles in the Costa Rican and Spanish newspapers in September of 1983 (nine months before the bombing) with the arrest of ETA member Gregorio Jimenez in San Jos, Costa Rica. He was charged with planning to assassinate Eden Pastora as part of an ETA commando group assignment. It was later shown that the news reports alleging ETA activities in Costa Rica aimed at the elimination of Pastora were generated by the intelligence community and were never substantiated. At the time, Costa Rican president, Luis Monge was in Spain, as was Nicaraguan Interior Minister, Toms Borg. Monge was trying to get European support for Costa Rican neutrality in the contra war, while Borg was attempting to get sorely-needed financial aid from the socialist government of Spain. As a result of the widely publicized arrest of Jimenez, a meeting between Monge, Borge and the president of Spain was cancelled and new tensions were created between Nicaragua and two potential Spanish-speaking allies.

The fact that the stories started about nine months before the bombing and continued to appear sporadically with very few facts has fueled speculation that this was part of an orchestrated campaign. [See Chronology of a Disinformation Campaign, for more details.]

On March 15, 1984, a little over two months before the bombing, the State Department's Office of Public Diplomacy (4) (OPD) contracted with a private consultant, Luis Miguel Torres, to produce a report on ETA terrorism in Central America. Torres, an associate of Frank Gomez who worked with the various Spitz Channell organizations (5), produced an interview with a man using the alias Alejandro Montenegro, a friend of Torres' and an alleged FMLN (Farabundo Marti Liberacion Nacional) defector. Allegations from this interview were leaked to the press immediately after the bombing.

Montenegro claimed that ETA had tried numerous bombings in El Salvador, very similar to the one at La Penca. David MacMichael, a former Central American analyst for the CIA, says that these events never took place. The Montenegro interview, it turned out, was the only piece of evidence that OPD was able to provide in an internal memo/chronology of alleged ETA terrorist activities in Central America sent to the NSC right after the bombing. Furthermore, the urgency to complete the Torres report is odd. Otto Reich, the titular head of OPD, wrote three memos demanding that the report be finished by March 26, 1984--eleven days from contract issuance to completion. Several sources note that this is an extremely short time for production of a government report--particularly one of such an obscure nature (6)-- raising the possibility that it was to be used as a cover for the La Penca bombing. The report was apparently not completed until May 5, 1984, sixteen days before the La Penca bombing.

On June 15, 1984, Otto Reich authored a 41-page memo entitlted "Press Reports on Attempt on Eden Pastora". The memo contains the text of the leaked Montenegro interview done by Torres, Department of State cables, Foreign Broadcast Information Service reports, and various press clippings (7). The last of these articles, written by Roger Fontaine (8) in the Washington Times on June 11, 1984, cites the Montenegro interview--which would not be distributed by the OPD for another 4 days--as his principal piece of evidence supporting the ETA story. Fontaine cites the French government assertion that the alleged Basque terrorist, Jos Miguel Lujua, was under house arrest in France at the time of the bombing, but concludes that, "US officials in Washington and San Jos remain confident, however, that Mr. Lujua or someone like him with similar terrorist connections was involved in the incident." [Emphasis added by author.] This is a classic intelligence community tactic--feeding disinformation to a journalist and then using his story as evidence which is then fed to other journalists through confidential briefings.

ABC World News Tonight seems to have been the primary outlet for the ETA story. It remains a puzzle why the rest of the US news establishment declined to use the ETA story emanating from the US intelligence community and the OPD. A few journalists said they immediately became suspicious of the story and decided to wait and see.

ABC Pentagon correspondent, John McWethy apparently harbored no such doubts. He boldly stated on ABC's evening news program that, "there is growing evidence the Sandinistas have hired international hit men from a Basque terrorist group known as ETA to have Pastora killed." He then mentioned the September, 1983, arrest of Gregorio Jimenez and the January, 1984, deportation of 6 ETA members from France to Panama. "They end up in Panama . . . later moving to Cuba, then to Nicaragua. Intelligence reports place a group of half a dozen Basques in Nicaragua's capitol. They stay at the Camino Real hotel, posing as journalists. The same hotel occasionally used by some of the journalists who attended the Pastora press conference 2 days ago."

McWethy's story is so elaborate, complete with fancy maps showing the routes taken by the "terrorists" that it could be used in journalism school as a shining example of superhuman investigative reporting. Instead, hidden propagandists were feeding these lies to him and he was reporting them as truth. He concluded, "Analysts [...] say the type of explosive used [is] strikingly similar to many other assassination attempts in Central America. All of them linked to Basque hit men." An amazing bit of information considering that the June 15, 1984, OPD memo was unable to reveal any other ETA "hits."

McWethy, when questioned about the sources of his information on the ETA connection reportedly said that a Department of Defense report, in addition to CIA information, pointed the finger at ETA. While there is no proof that the OPD briefed McWethy, it is interesting to note that one of the principal "official leakers" at the OPD was an Air Force intelligence officer on loan to OPD named Mark L. Richards, working under the actual head of the OPD, Walter Raymond, Jr., a CIA psychological warfare expert(9).

MacNeil/Lehrer, the only other major US news organization to carry the ETA story, was not as dramatic or positive as ABC. The program featured an in-depth interview with Robert Leiken, a senior associate of the Carnegie Foundation for International Peace and a neo-conservative who was secretly on the payroll of the covert Spitz Channell fundraising/propaganda operation at the time. Leiken was introduced as an expert on Central America without any mention of his recent conversion from liberalism or his involvement with Channell. Leiken said that he had heard that Pastora's followers were denying that the CIA was behind the bombing, and claimed that Basque terrorists connected with the ETA had instigated it. Actually, Pastora concluded fairly quickly that the assassination attempt was sponsored by the CIA and the FDN.

Thus, two of the five major US TV networks used information from the Office of Public Diplomacy and other intelligence sources along with Costa Rican stories of dubious nature to quickly paint an elaborate scenario blaming the bombing on the Sandinistas and the Basque ETA. Richard Dyer, publisher of the Costa Rican English language newspaper, the Tico Times, said, "[The ETA story] didn't make too much sense, but on the other hand we had no other clues and so for the moment it was sort of accepted, maybe we were getting somewhere." Derry Dyer, co-publisher of the Tico Times , which had employed Linda Frazier, the only US citizen killed at La Penca, said, "It certainly looks like there was an active disinformation campaign. Certainly there were so many leads that when tracked down turned out to be completely false. And they served to get everybody off the trail in the days following the bombing."

The dis-information had additional effects. First, it obscured the identity of the real killer and arguably contributed to his escape. Second, these stories inflicted further injury on Tony Avirgan. Following the bombing, ABC News flew a specially equipped Lear jet to San Jos to transport the severely-injured reporter, at the time working for ABC, to the US for medical treatment. Because of his reported links to Basque terrorists, Avirgan was detained for three days in Costa Rica, while the assassin slipped away.

The horror stories associated with the contra war continue to unfold although there seems to be a general apathy on the part of mainstream American investigative journalists. Many analysts think that the purpose of the La Penca bombing could well have been to inflame the tensions between Nicaragua and Costa Rica and to provide an excuse to invade Nicaragua with American troops. Whatever its purpose, the ETA disinformation campaign is typical of CIA propaganda operations which have preceded successful coups d'etat. In Guatemala, in 1954, the CIA set the stage with clandestine radio stations and other types of covert propaganda operations. In Chile, in 1973, the CIA ran one of its most sophisticated propaganda campaigns against Allende.

The ETA story raises serious questions about US intelligence operations. Should the intelligence community be prohibited from influencing the media and Congress? How can this be legislated and monitored, given the failures of the Congressional oversight committees, the reticence of the Iran-contra committees, and the ability of a charismatic president to blithely sidestep the Boland Amendment? Unfortunately, the ETA story is only one of thousands of such covert operations that has been discovered. Covert intelligence operations are rarely exposed and even when they are, they are seldom censured. The only hopeful development in all of this is the beginning of a new movement, partly generated by the Christic Institute's La Penca lawsuit, to aggressively challenge the National Security Act of 1947. Many feel that only by rewriting this original charter for American intelligence operations can the fundamental cancer creating havoc worldwide be excised.

Research assistance by Sheila O'Donnell and Rick Emrich.


(1) ETA (Euzkadi Ta Askatasuna) translates roughly as Basque Homeland and Liberty. ETA has been waging a guerilla/terrorist war for independence from Spain and France for decades.

(2) The Secret Team, named in the civil RICO indictment, includes Gen. Richard Secord, Gen. John Singlaub, Albert Hakim, Adolfo Calero, Ted Shackley, Thomas Clines, and Chi Chi Quintero. The lawsuit was dismissed by the Chief Federal judge in Miami on June 24th, 1988, one working day before the historical trial was to begin. The Christic Institute and the plaintiffs, Tony Avirgan and Martha Honey, are appealing in the 11th Circuit Court of Appeals in Atlanta.

(3) Pastora had called the La Penca press conference, at the insistence of Costa Rican security officials, to announce an end to years of conflict with the Somocista contras in Honduras who, along with the CIA, had been pressuring him to join forces with them, and thus, present a unified image to Congress. Ironically, the front page of the New York Times, June 1, 1984, carried the bombing story prominently while underneath was a small story about Pastora cutting all ties with the FDN and denouncing the CIA.

(4) The OPD was created to influence the public and Congress on the contra war and other Reagan administration covert wars around the world. OPD was found guilty of conducting "white propaganda" efforts by the Government Accounting Office in 1987, and quickly became the only casualty of the Iran-contra affair. For further information, see two articles by Peter Kornbluh: "Reagan's Propaganda Ministry", Propaganda Review #2, and the Washington Post, 9/4/88, p. C-1.

(5) Carl R. ("Spitz") Channell raised money, legally and illegally, for the contras from 1985 until 1987 when he pled guilty to defrauding the IRS and the US Treasury. At one point, Channell controlled an elaborate network of non-profit organizations and consultants.

(6) The "Ultimate Destination" for the 25 page report was The Official Coordinator for the U.N. Conference on Scientific and Technological Development. The director of this office denied ever commissioning or seeing the report.

(7) The State Department refused to turn over the OPD memo in response to subpoena served in the Christic Institute lawsuit. In fact, State has released only one document under subpoena to the Christic attorneys, the cover sheet to a January 20, 1987 twenty-page report on the Christic lawsuit with a handwritten note at the top by a State Department official named Peter Olson. The note says, "Delib. CIA effort to throw people off track of real perpetrators."

(8) Fontaine is a close associate of Gen. Singlaub and one of the principal WACL (World Anti-Communist League) creators of the contra war. He served as Special Assistant for Central American Affairs on the NSC in the early '80s and works for the Georgetown Institute for Strategic Studies in addition to writing for the Washington Times.

(9) Virtually all of the specialized personnel at the OPD were officially "on loan" from other agencies. This helped to obscure the true nature of the OPD. Thus, while Otto Reich, a political appointee, was the titular head, Walter Raymond was the actual operational director.

RESTRICTIONS: Copyright 1991 by Propaganda Review. All rights reserved under the International Copyright Union, the Universal Copyright Convention, and the PanAmerican Convention. Unauthorized republication is prohibited but reprinting (or reposting in other conferences or networks) of all Propaganda Review articles is encouraged. Please contact Johan Carlisle (jcarlisle), Managing Editor, for permission.

Copies of Propaganda Review magazine (with illustrated articles) are available for $6. [Note: issues #1 and #5 are out of print.] For more information, to order back issues, or to subscribe to PR ($20/4 issues; $40-libraries & foreign) contact jcarlisle (via e-mail on PeaceNet), call (415) 332-8369, or write to:

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Interview With Carl Jensen

Twenty Years of Censored News

 by Jeff Elliott

Far more than a rehash of old news, Jensen reveals new important developments

Did you know about the CIA link to the Savings & Loan Scandal? Or that the worst nuclear accident in U.S. history was near the small town of Church Rock, New Mexico? Or that child labor is worse today than during the Great Depression? Carl Jensen knows about these suppressed news stories and more -- 200 of them, in fact. The founder of Project Censored, Jensen has written a book that updates twenty years of censored news.

Starting in 1976, Jensen led students and colleagues at Sonoma State University in scrutinizing media coverage -- or usually, lack of coverage -- of important news. Now cited in journalism textbooks and by scholars like Noam Chomsky and Ben Bagdikian, Project Censored and its annual report of the year's top censored stories are widely respected.

Jensen, who retired in 1996, has updated the first two decades of Project Censored stories in a new book ("20 Years of Censored News," Seven Stories Press). Far more than a rehash of old news, Jensen reveals new developments with these important but Northern California office.

3 out of 4 stories are still overlooked

Monitor: Your updates are full of surprises. Although some stories eventually made it into the mainstream press, many are still dangling.

Jensen:I had a lot of fun with this book. Each of the stories turned out to be like a mystery. Tracking it down, seeing what happened, bringing it up to date. It was a marvelous experience. I wanted to do more than just the history of Project Censored; I wanted to go back and find just what kind of impact we've had over these last twenty years. Unfortunately, I discovered three-quarters of the stories are still overlooked, censored stories today -- they still haven't been told completely.

How a nondescript Reagan decision lead to an airline crash

Often it's hard to understand why these stories are ignored, or take years to make it into the headlines. The human radiation experiments made the Project top ten list in 1986, but the media still ignored it for several years.

I thought that was a fascinating story. It was just incredible that they were using unsuspecting American citizens as guinea pigs for testing radiation poisoning -- but most of the media paid no attention until Eileen Welsome at a small daily, the Albuquerque Tribune, did a series in 1993. Then suddenly it went out on the wire. She won a Pulitzer Prize. When journalists say, "That's an old story, nobody's interested," I disagree -- a lot of these stories are potential Pulitzer Prize winners. With many stories, I also cross reference them to other stories to show their connections.

It's also a great reference tool for journalists because your updates reveal new angles. For example, you take a nondescript 1985 story, "The Reagan Autocracy" and show how it lead to an airline crash.

That's a classic example. Some might say the media can't be expected to cover an obscure executive order like the one Reagan signed in 1985, but a journalist in a small alternative publication noticed that it meant doing cost-benefit analysis on government regulations. Then in 1993, the National Transport Safety Board wanted the FAA require smoke detectors and other safety measures in cargo holds of commercial airliners. But the FAA said no -- it's wasn't cost effective, and according to Reagan's executive order, they didn't have to comply. Then of course, in 1996 the Valujet plane goes down in Florida, losing 110 lives. Investigators discovered that if there had been smoke detectors in cargo holds it wouldn't have happened -- that those people would be alive today.

The Contra-Drug coverup

Another Project Censored story that's remained controversial is the Contra-Drug case.

We listed that in 1987, and thought it was an important story being overlooked by the mainstream media. The Christic Institute report that year described the whole thing -- the drugs, contra, and CIA connection. What they didn't cover was what was happening with the drugs up here in urban centers like Los Angeles..

Then in 1996, Gary Webb at the San Jose Mercury News looks into that story and does incredible, exhaustive research. What appeared in the newspaper was just the tip of the iceberg, but on the Internet it was all there: The letters, interviews, everything. The background of this entire story. Webb updated the Christic Institute to the present day, showing the impact of that whole conspiracy in terms of drugs in Los Angeles.

When the Christic Institute did the story and we publicized it as one of the censored stories, none of the media was interested. And when Webb did the story, the same thing happened -- few paid attention. But when it went out on the net, it exploded overnight. Everybody was talking about it. Then the three major dailies in the United States had to do something; they couldn't just let it go. Within ten days, all of them came out with articles and editorials lambasting Gary and the Mercury News for having done that story. The New York Times, Washington Post, and Los Angeles Times all attacked the story savagely, insisting that there was no CIA drug connection, and so on. But those are blatant lies! They know damn well that in the past there have been many connections between the CIA and drugs in Southeast Asia, Central America, and other places, too. There have been Congressional investigations on it.

What happened to Gary Webb is a good example of what happens when you do these sensitive stories. He was literally shoved out by the Mercury News and the editor ran a column, apologizing and kowtowing to the three major newspapers. To let his own journalist down like that... it was incredible. I was recently asked for my opinion on the future of journalism in America, and I said the outlook is very bleak.

A related story tied the CIA with the Savings and Loan scandals. The Houston Post broke that story and it went nowhere at all.

The writer of that story, Pete Brewton, was the last person you'd expect to be an investigative journalist; he was soft spoken, an all-time nice guy. But he did an extensive investigation and produced this series of stories about the CIA and S&L scandal. The one thing that he wasn't able to do -- and he conceded this -- was produce that smoking gun. But the circumstantial evidence was extensive. Like the case with Gary Webb, the only time it was mentioned in the media was when it was to criticize the story or savage him.

In your introduction, you draw parallels between our situation today and a century ago. Once again we have robber barons, threats to public health -- and media silence on those critical issues.

I was recently asked for my opinion on the future of journalism in America. I said the outlook is very bleak. First, there's the increasing monopolization of the press. Giant conglomerates are taking total control -- ten companies control most of the media in the U.S.

Also, they're starting to teach "IMC" in journalism school --Integrated Marketing Communication. It combines advertising, marketing, public relations and journalism. That's already happening in the media. Last fall, the LA Times merged its advertising and editorial departments -- and they announced gleefully that executives from advertising and marketing and editorial will sit down together to map out the news strategy. This is totally unheard of. The division between editorial and advertising at a responsible newspaper was always sacrosanct. And now the LA Times -- one of the top three newspapers in the country -- is blatantly doing that. Also consider that Chrysler has directed its advertising agencies to get magazine articles before they're printed to see if they want to advertise in those issues. It's chilling.

There are a lot of people out there saying that this is the wave of the future, but I'm not so sure of that, personally. Sooner or later the media moguls are going to have to look at what's happening with their business -- they're losing readers and TV news shows are losing viewers. The losses are in the millions. They even have a name for them: "The Vanished." Maybe they'll discover the problem is we're giving the public what they want, not what they need.

I've debated this with Jim Hightower, who's optimistic because of the alternative news in the United States -- programs like his, NPR, Pacifica radio and the alternative weeklies. But I don't agree. I don't see those media reaching out with the scope and intensity needed to get these stories out to the public.

That's a depressing message

The fact is, we're losing. ABC reporters went undercover to investigate the Food Lion chain and found conditions appalling. It's an impressive story that makes an impact. But then Food Lion sues ABC -- not for libel, but for the undercover reporters making false statements on their application form. And Food Lion won the case. They sued not because of the truth of the article -- they admitted the conditions were as bad as they were. That's frightening.

The latest example, also about food, is Oprah Winfrey's being sued for saying she would never eat another hamburger. Why? Because in Texas there is a food disparagement law -- if you say anything nasty about meat or apples you can be sued if it causes a loss of a farmer's income. If you can have food disparagement law, how soon will it be before we have automobile disparagement law? We wouldn't have had Ralph Nader writing about the Corvair. Or a book disparagement law, so you can't criticize a book. This is an endless thing. If enough people get madder than hell, they may be able to get their stories out.

The exposure of sweatshops in recent years was mostly through the hard work of people like Charles Kernaghan and the National Labor Committee, who dogged the press to cover the topic. They did much of the investigative work to get that story out. Will the future have activists bringing investigative stories to journalists?

Absolutely. When the press fails to do its job, groups arise to do the job for them, then embarrassing the press into running those stories and continuing their research. That's a terrific thing.

When I was doing the Project Censored newsletter several years ago, I received a letter from a little veteran's organization in the Northeast. They were hoping to get some media coverage because many of their Gulf War veterans were becoming ill. Nobody knew what was happening, but they wanted somebody to investigate. I wrote that up several times in my newsletter, but nobody picked it up. Of course, it developed into a major story about ongoing health problems. Veterans groups coordinated their efforts to push it -- they literally made that a national issue by hounding the media and politicians to pay attention. If enough people get madder than hell through their own grassroots organizations, they may be able to get their stories out.

My only hope is that we might find ourselves in another golden age of muckraking. And as with the muckrakers in the early part of the century, it will have an impact on the elected representatives and some changes will be made. In 1906, Upton Sinclair wrote his famous muckraking book, The Jungle, going undercover in Chicago meat packing plants. I've recently been reading his correspondence with Teddy Roosevelt; it's incredible the impact that his book had. It led to the first Pure Food and Drug Act in the nation -- it made a difference.

"20 Years of Censored News," by Carl Jensen, published by Seven Stories Press, New York, is available in bookstores nationwide or by calling 800/596-7437

Comments? Send a letter to the editor.

Albion Monitor Febrary 4, 1998 (http://www.monitor.net/monitor)

All Rights Reserved.

Contact rights@monitor.net for permission to reproduce.


Subject: Part 1, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

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     *    *    *    *    *  MORNING EDITION  *    *    *    *    *
     EDITOR: John DiNardo
                 From the Pacifica Radio Network station,
                 WBAI-FM (99.5)
                 505 Eighth Ave., 19th Fl.
                 New York, NY 10018

Part 1, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

The Public's right to know is not always what the Public ends up
getting. The Public frequently gets such one-sided, biased
information -- and not just from the mass media. It's easy to have
a long arm that protects the special interest groups: this kind
of a "one world family" of insiders that is capable of affecting
federal judges, U.S. attorneys, to slant or obstruct justice, to
hide or cover up crucial information, and to interfere with our

Daniel Sheehan, as much as any attorney in the United States, and
the Christic Institute have taken it upon themselves to try to
challenge some of these injustices and to give us the information
that they have distilled from their work that gives us a different
perspective. Unfortunately, rare is it that any of the mainstream
media covers the work of the Christic Institute or of Daniel Sheehan.
And if they did, it would be a very enlightened Public who would be
benefiting from this. Welcome to our program, Daniel Sheehan.

Thank you, Gary.

Daniel, earlier on, one of our guests was talking about -- and I'd
like for you to follow through on this theme -- that what we're told
in the media (and what we're told officially from Government sources)
and what is the truth are frequently at varying degrees against
each other. Give us one specific .....

That's absolutely true. There has been a major campaign on the part
of the Central Intelligence Agency, for example, to place Central
Intelligence Agency agents, trained agents, IN various news media
posts. We've found the documents on this. It was called "Operation
Mocking Bird". And they placed Central Intelligence Agency operatives
in places like TIME Magazine and LIFE Magazine, the New York Times,
inside CBS [TV] and ABC [TV] News.

Originally, the intent of "Operation Mocking Bird" was to make certain
that these major media outlets reflected an adequately anti-communist
perspective. And then, of course, as they became entrenched and
in-place, any time the Central Intelligence Agency wanted a story
killed or distorted they would just contact their agents inside.
Now, they have bragged openly in private memos back and forth inside
the Agency about how proud they are of having really important
"assets" inside virtually every major news media in the United States.
And I've encountered this repeatedly.

For example, the Chief National Security Correspondent for TIME
Magazine, Bruce Van Voorst, is a regular Central Intelligence
Agency officer.  It turns out that Ben Bradlee from the Washington
Post was a regular Central Intelligence Agency officer prior to
coming to his post at the Washington Post.
Bob Woodward at the Washington Post was the Point-Briefer for
U.S. Naval Intelligence of the Joint Chiefs-of-Staff before he went
over to the Washington Post.
We find these people constantly in the news media and, as I may
have pointed out to you in one of your shows, when the New York
Times was refusing to print any information about Oliver North and
Richard Secord [President Reagan's assistants], Albert Hakim and
Rob Owen, and all of these other men who, throughout 1985 and
1986, were engaged in this MASSIVE criminal conspiracy to violate
the Boland Amendment prohibiting any weapons shipments to the
Contras, and who were involved in smuggling TOW missiles to Iran ....
as this information was being communicated to the New York Times by
sources that we had, the New York Times absolutely refused to print
any of this. And the reason for it was, according to Keith Schneider
-- who was one of the reporters assigned to at least address this
stuff and look into it .... he said that they were refusing to
print any of it because their high-level sources inside the Central
Intelligence Agency refused to confirm the stories.

Now, that kind of relationship between self-conscious "assets" of
the Covert Operations Director of the Central Intelligence Agency,
a political police force on an international level, if you will,
and an economic police force to protect the ostensible economic
interests of United States industries .... to place those people
inside a news media -- which, under the First Amendment, ostensibly
has the responsibility to critique and investigate potential
injustices on the part of the State, inside the Government --
is an extraordinarily dangerous development here in the United States.

Thank you for that insight.  Could you also give us some
understanding of one case in particular (if you could highlight it)
that you're privy to, to show how they can export a form of terrorism,
how they can support movements to destabilize DEMOCRACIES in any country
whose position they don't choose to support, where multi-national
corporations' interests may feel threatened and, as a result,
they'll use our various branches of Government to thwart the local
populace, invade their sovereignty, disrupt their complete
political system, and how they manipulate the stories in the
Press so that it's NEVER the way that we're told it is.
                    ~~ TO BE CONTINUED ~~
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Subject: Part 2, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

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      News They Never Told You .... News They'll Never Tell You
   DATE: _________ __, ____                         PRICE: 10 CENTS
     *    *    *    *    *  MORNING EDITION  *    *    *    *    *
     EDITOR: John DiNardo
                 From the Pacifica Radio Network station,
                 WBAI-FM (99.5)
                 505 Eighth Ave., 19th Fl.
                 New York, NY 10018

Part 2, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

Well, for example, I think one of the most obvious stories is about
the democratic socialist Government of Chile under Salvador Allende,
when he was popularly elected by a significant majority of the
populace in Chile, under a hundred-year-old democracy down there.
Now the confidential documents make it perfectly evident that the
Nixon Administration and Richard Helms [Director] of the Central
Intelligence Agency and Henry Kissinger, the National Security
Advisor, began a MAJOR covert campaign to attempt to destroy that

They mounted what they called the "Track One" and "Track Two"
strategies. The "Track One" strategy was to engage in an overt
political propaganda campaign against the Allende Government:
criticizing him constantly, attacking his economic programs,
attempting to give money through A.I.D. and certain other
above-the-table programs to counter the democratic socialist, or
mixed economy that was being advocated by Allende. Politically, it
was a completely democratic process, but economically, they were
looking for alternative mechanisms for stimulating the economy,
having some industries supervised by democratic governmental forces,
and others left completely in the private sector.

This "Track One" program, however, was not allowed to be the only
mechanism by means of which the Nixon Administration tried to destabilize
the Governmment. They had an ultra-covert program called "Track Two,"
and under this program, coordinated by Kissinger and the Central
Intelligence Agency under Richard Helms, they did such things as,
for example, they had two operatives of the Director of Latin
American Affairs for the Central Intelligence Agency, one being
Theodore G. Shackley, from 1971 all the way up to 1973. They, in
fact, ran the "Track Two" operation wherein they did such things as
physically kidnap the Chief-of-Staff of President Salvador Allende,
General Schneider and had him ASSASSINATED. They also met covertly
with the military forces under Ernesto Pinochet, a virtual fascist
inside the military, to plan and plot a military overthrow of the
democratically elected government, which they pulled off in September
of 1973. And they ultimately assassinated President Salvador Allende.

They then pursued the Ambassador of the democratic Government of
Chile in the United States. In fact, they tracked him down and
assassinated him right on the main streets of Washington, D.C.
They blew up his car and killed him.

   [JD: The murder victims were Ambassador Orlando Letelier and
        his American secretary, Ronnie Moffit.]

Now that kind of activity was being conducted by the Central
Intelligence Agency all the way up to and through 1976 when George
Bush was the Director of the Central Intelligence Agency. It was in
1976 that the Chilean Ambassador to the United States, from the
former democratic Government, was assassinated. That democratic
Government was overthrown by Ernesto Pinochet, and a military
dictatorship was established down in Chile.

These are the kinds of activities that they [the CIA] have been
engaged in for a long time. They have done this pursuant to a
doctrine which was enunciated back in 1954 under a secret commission,
that was set up inside the Central Intelligence Agency, known as
"the Doolittle Commission". And they articulated -- in a classified
document which has now been obtained by the Christic Institute --
stating very specifically that they were engaged in a secret war
against forces of socialism and communism which had an alternative
economic theory of development. And they said that it was necessary
to combat these forces with any and all means necessary. And it
said in the report that it was going to be necessary to abandon the
normal standards of decency and fair play, that are believed in by
the American Public, in order to defeat these forces of socialism
and communism. And therefore, it's going to become inevitably
necessary to CAUSE the People of the United States to come to grips
with the need to abandon these traditional standards of decency;
and that that was going to be part of the obligation of the Central
Intelligence Agency: to, subtly and over time, persuade the American
Public that it was naive and impossible to adhere to these standards
and principles of honesty and decency in the international theater.
                     ~~ TO BE CONTINUED  ~~
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Subject: Part 3, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

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   DATE: _________ __, ____                         PRICE: 10 CENTS
     *    *    *    *    *  MORNING EDITION  *    *    *    *    *
     EDITOR: John DiNardo
                 From the Pacifica Radio Network station,
                 WBAI-FM (99.5)
                 505 Eighth Ave., 19th Fl.
                 New York, NY 10018

Part 3, DANIEL SHEEHAN: CIA Agents Infest U.S. Mass Media

And that, of course, was what were the high halcyon days of this,
under George Bush, when he was the Director of the Central
Intelligence Agency, and a little bit earlier when Richard Nixon
was the President of the United States. And when you have that kind
of attitude toward the rest of the world, it becomes inevitable, of
course, that that kind of infection tends to feed back into the
domestic policies of the United States, such that you have Richard
Nixon engaging the "Plumbers" unit, and the others who began to use
espionage and basically terrorist tactics against the domestic
citizenry of the United States: infiltrating Black civil rights
organizations, the feminist organizations, the anti-war groups.
And, in fact, they began playing dirty tricks on them: writing
false memos, accusing the leaders of certain movements of
committing adultery, or of having affairs with other people inside
[their organizations]; consciously attempting to disrupt and to
destroy any type of democratic citizens' organization that
took a position that was contrary to the position advocated
SECRETLY by the Central Intelligence Agency.

That's the kind of infection that is at the heart of the democratic
principles of our nation that we still see manifesting in things
like the Iran-Contra Scandal with Oliver North and Richard Secord
and the others who, in fact, secretly defied all of our democratic
institutions: the resolutions of the Congress, the clearly
enunciated voice of the majority of the people of our country who
did not want to support the Contras in Latin America who were the
former military national guard officers of the dictator Anastasio
Somoza in Nicaragua. And so, these men went underground and
undertook criminal covert warfare which inevitably led them into
seeking illicit sources of money, since they couldn't get it from
the tax monies of the American People. And they ended up
establishing alliances with the Colombian cocaine cartel, that is
still in the news, even as of this morning, with Pablo Escobar
fighting his way out of his own luxury prison to escape.

We have this kind of history, tracking all the way from the end of
the Second World War in 1945 and 1946, all the way up to today, the
very day that we're speaking here, with manifestations of this type
of criminal undercover alliance that they have. And it is hacking
at the very heart of the institutions of democracy.

Thank you, Dan, for that explanation.  I'm wondering at what point
we will also begin to connect the corporate structures that function
as a government policy think-tank, frequently in the multi-national
corporations in different countries, that decide that THEIR use of
the natural resources, THEIR use of the cheap labor, THEIR use of
the local population, THEIR general support of the dictators,
all of this is in THEIR economic best interests. And then, if there
is any dissent .... if there is any journalistic dissent, political
dissent, social dissent -- they can then contact THEIR friends
in OUR State Department who then use OUR Defense Department as a
weapon of foreign policy to protect the interests of these
multi-national corporations.

Then they whip the media into a frenzy, always showing THEIR side.
But it is never an honest projection, so that when they do intervene,
they can violate the national sanctity of other countries, just like
they did with Grenada and Nicaragua and El Salvador [worst of all,
with Panama and Iraq] and these other countries.

Well, there are a number of very stark examples of this, of course.
Historically, Gary, one of the most transparent is the action
taken against Guatemala in 1954, wherein the United Fruit Company,
a member of the board of directors of which was the Director of
the Central Intelligence Agency, Allen Dulles,
    [JD: Allen Dulles also was, ostensibly, one of the masterminds
     who engineered the murder of President John F. Kennedy.
     Jim Garrison has said that "Allen Dulles is a thoroughly
     evil man!"]

the brother of John Foster Dulles, who, in fact,
was the Secretary of State of the United States
[under President Eisenhower].  His brother, Allen, was the
Director of the Central Intelligence Agency and a member of the
board of Directors of United Fruit Company, which owned VAST land
holdings in the country of Guatemala, which had been SEIZED from
the peasants by a major military government that was basically
installed and kept in power by covert means of the Central
Intelligence Agency.

When, in fact, the citizenry of Guatemala had organized themselves
and had, in fact, installed a democratic government in Guatemala
under Arbenz, the Central Intelligence Agency coordinated a
major covert alliance with elements of the military in Guatemala
and undertook a military seizure of the government in 1954.
That was coordinated by E. Howard Hunt.

   [JD: C.I.A. operative Marita Lorenz has testified, under oath
    in a civil court, that E. Howard Hunt was the paymaster to the
    assassins of President Kennedy. So Hunt has been Dulles's C.I.A.
    underling through at least a decade of C.I.A. atrocities.]

Now, that overthrow was -- for one of the major reasons -- to reinstall
the United Fruit Company because the new democratic government
under Arbenz had begun to question the legitimacy of the United
Fruit Company to hold hundreds of thousands of acres of irrigatable
land under the control of growing bananas for export, instead of
allowing the peasants -- who had originally owned all of that land
which had been illegitimately seized by the military government --
to be reinstated with the possession of their land.

So, it was very clear, in that particular instance, that there is a
direct relationship between the economic interests of a privately-
owned, profit-making company, the United Fruit Company, and American
foreign policy, which was undertaken covertly and criminally by the
Central Intelligence Agency, at the helm of which was a member of
the board of directors of the United Fruit Company.

   [JD: There is, indeed, a domination of our U.S. State Department
    and U.S. Central Intelligence Agency by the United Fruit Company.
    A personal acquaintance of mine told me that, as a worker, he had
    witnessed banana boats of the United Fruit Company having their
    decks reinforced with steel plates in preparation for the C.I.A.'s
    Bay of Pigs Invasion of Cuba in April of 1961. He also told me that
    when these banana boats returned from their combat mission, their
    decks were riddled with holes, presumably caused by heavy-caliber
    aircraft machine gun rounds.]

Now, those things have happened again and again. We have examples
in Panama. We have examples in, of course, El Salvador, and we have
examples in Nicaragua. There is some very unheralded writing in
books about this. There is a former general of the United States
Marine Corps, a man named Smedley Butler, who led three of the
expeditionary forces of the United States Military into Nicaragua,
back during the 1930s. And he eventually -- from direct experience
on the ground -- came to his own personal conclusion that he could
no longer participate in doing those kinds of things because, as he
said, he realized that he was just a gun-thug for Brown Brothers-
Harriman, the major American capital investment corporation.
                    ~~ TO BE CONTINUED ~~
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Subject: Part 4, DANIEL SHEEHAN: C.I.A. Agents Infest U.S. Mass Media

                     ____                    ____
   --____    ____----    ----____    ____----    ----____    ____--
         ----                    ----      &nbssp;             ----
            T H E   P E O P L E'S   S P E L L B R E A K E R
         ____                    ____                    ____
   __----    ----____    ____----    ----____    ____---- &nbbsp;  ----__
                     ----      &nbssp;             ----
      News They Never Told You .... News They'll Never Tell You
   DATE: _________ __, ____                         PRICE: 10 CENTS
     *    *    *    *    *  MORNING EDITION  *    *    *    *    *
     EDITOR: John DiNardo
                 From the Pacifica Radio Network station,
                 WBAI-FM (99.5)
                 505 Eighth Ave., 19th Fl.
                 New York, NY 10018
                    (212)279-0707    wbai@igc.apc.org

Part 4, DANIEL SHEEHAN: C.I.A. Agents Infest U.S. Mass Media

General Smedley Butler couldn't do this anymore, so he retired from
the United States Marine Corps and eventually led a major movement
in the United States to try to stop this kind of thing. In fact,
when Franklin Roosevelt was elected President, major economic
interests in the United States attempted to recruit General Smedley
Butler to lead a military coup against the United States because
there were large elements in the banking industry -- J. P. Morgan
and all the way up to and including the father of John F. Kennedy,
Joseph P. Kennedy -- who, in fact, were EXTREMELY sympathetic to
the state capitalist system that was being set up by Hitler and the
Nazi Party in Germany. There were major investments being made.

There were a number of books written, giving great detail about the
kind of support that existed in very high-level industrial and
banking circles in the United States, through the 1930s, for this
peculiar concept of economics in government called "state
capitalism," whereby you don't really have just simple private
industry. And you don't have private enterprise and free
enterprise. What you have, instead, is a system by means of which
the organs of the state -- of the government -- gather tax money
from the average people and they transfer it to the private
companies that are owned by these few families. And they subsidize
those companies, whether they be major weapons industries,
ball-bearing factories, rolling-steel plants, etc.  Major heavy
industry is subsized by the hard-earned taxed salaries of average
working citizens. And they attempt to take away the risks of owning
and running huge private businesses like that under the theory that
those businesses are so big and so powerful that they need to be
kept healthy and stable by the tools of the state and the organs of
the state for the general health of the country.

So, that's what they do. That's what they did in Germany throughout
the 1930s. That was the basic thesis behind what they called
"national socialism" [naziism], which was -- from a purely
political science point-of-view and in economic analysis --
a system of "state capitalism."

But that's also one of the tenets of this "New World Order."

That's exactly right!

People should understand where it's coming from. The same
architects of this old capitalist system are now the architects of
this new capitalist system [the New World Order].

Daniel Sheehan, I want to thank you very much for sharing insights
with us, as always, lucid and in-depth. And I appreciate your
participation. Could you please give us the phone number of the
Christic Institute?

           The Christic Institute
           P.O Box 845
           Malibu, CAlifornia 90265
              (310) 456-1283
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *



Volume I:
Investigations and Prosecutions
Lawrence E. Walsh
Independent Counsel
August 4, 1993
Washington, D.C.


Division for the Purpose of Appointing Independent Counsel
Division No. 86-6



     Letter of Transmittal iii
     Executive Summary xiii
     Summary of Prosecutions xxiii

     Part I The Underlying Facts 1

     Part II History of the Investigation 25

     Chronology of Key Public Developments 51

     Part III The Operational Conspiracy:
     A Legal Analysis 55

     Part IV Investigations and Cases:
     The National Security Council Staff 77

          Chapter 1 U.S. v. Robert C. McFarlane 79
          Chapter 2 U.S. v. Oliver L. North 105
          Chapter 3 U.S. v. John M. Poindexter 123
          Chapter 4 Paul B. Thompson 137
          Chapter 5 Fawn Hall 147
          Chapter 6 Robert L. Earl 151
          Chapter 7 Thomas C. Green 155

     Part V Investigations and Cases:
     The Flow of Funds and the Private Operatives 157

          Chapter 8 The Enterprise and Its Finances 159
          Chapter 9 U.S. v. Richard V. Secord 173
          Chapter 10 U.S. v. Albert Hakim 179
          Chapter 11 U.S. v. Thomas G. Clines 181
          Chapter 12 Swiss Funds Recovery Efforts 185
          Chapter 13 Private Fundraisers (U.S. v. Carl R. Channell and U.S. v. Richard R. Miller) 187
          Chapter 14 Other Money Matters 193

     Part VI Investigations and Cases:
     Officers of the Central Intelligence Agency 199

          Chapter 15 William J. Casey 201
          Chapter 16 Robert M. Gates 223
          Chapter 17 U.S. v. Clair E. George 233
          Chapter 18 U.S. v. Duane R. Clarridge 247
          Chapter 19 U.S. v. Alan D. Fiers, Jr. 263
          Chapter 20 U.S. v. Joseph F. Fernandez 283
          Chapter 21 CIA Subject #1 295
          Chapter 22 James L. Adkins 309
          Chapter 23 Conduct of CIA Officers in November 1986 311

     Part VII Investigations and Cases:
     Officers of the Department of State 325

          Chapter 24 George P. Shultz, M. Charles Hill and Nicholas Platt 325
          Chapter 25 U.S. v. Elliott Abrams 375
          Chapter 26 Edwin G. Corr 393

     Part VIII Investigations and Cases:
     Officers of the Department of Defense (U.S. v. Caspar W. Weinberger and Related
     Investigations) 405

     Part IX Investigations of the White House 443

          Chapter 27 President Reagan 445
          Chapter 28 George Bush 473
          Chapter 29 Donald P. Gregg 485
          Chapter 30 Donald T. Regan 505
          Chapter 31 Edwin Meese, III 525

     Part X Political Oversight and the Rule of Law 555

     Part XI Concluding Observations 561

     Index 567

Source for this document



Division for the Purpose of Appointing Independent Counsel
Division No. 86-6




                                           Volume I:
                                 Investigations and Prosecutions

                                       Lawrence E. Walsh
                                      Independent Counsel

                                          August 4, 1993
                                         Washington, D.C.



| Presidential Scandals | General Articles | The Presidents | GME Contents |


          The tangled U.S. foreign-policy scandal known as the Iran-contra affair came to light in November
          1986 when President Ronald REAGAN confirmed reports that the United States had secretly sold
          arms to Iran. He stated that the goal was to improve relations with Iran, not to obtain release of U.S.
          hostages held in the Middle East by terrorists (although he later acknowledged that the arrangement
          had in fact turned into an arms-for-hostages swap). Outcry against dealings with a hostile Iran was
          widespread. Later in November, Att. Gen. Edwin Meese discovered that some of the arms profits
          had been diverted to aid the Nicaraguan "contra" rebels--at a time when Congress had prohibited
          such aid. An independent special prosecutor, former federal judge Lawrence E. Walsh, was
          appointed to probe the activities of persons involved in the arms sale or contra aid or both, including
          marine Lt. Col. Oliver North of the National Security Council (NSC) staff.

          Reagan appointed a review board headed by former Republican senator John Tower. The Tower
          Commission's report in February 1987 criticized the president's passive management style. In a
          nationally televised address on March 4, Reagan accepted that judgment without serious

          Select Congressional committees conducted joint televised hearings from May to August. They
          heard evidence that a few members of the NSC staff set Iran and Nicaragua policies and carried
          them out with secret private operatives, that the few officials who knew about these policies lied to
          CONGRESS and others, and that the contras received only a small part of the diverted money.
          Former national security advisor John Poindexter stated that he personally authorized the diversion
          of money and withheld that information from the president. William J. Casey, former director of the
          Central Intelligence Agency, who died in May 1987, was implicated in some testimony, but the
          extent of his involvement remained unclear.

          Special prosecutor Walsh continued his investigation. On Mar. 11, 1988, Poindexter's predecessor
          as national security advisor, Robert McFarlane, pleaded guilty to criminal charges of withholding
          information from Congress on secret aid to the contras. A year later McFarlane was fined $20,000
          and given two years' probation. On Mar. 16, 1988, a federal grand jury indicted North, Poindexter,
          and two other persons on a number of charges including conspiracy to defraud the U.S. government.
          The trials were delayed by legal maneuvering that in part involved questions of releasing secret
          information. In May 1989 a jury convicted North of 3 of the 12 criminal counts he was ultimately
          tried on; in July the court fined him $150,000 and gave him a three-year suspended sentence. On
          Apr. 7, 1990, Poindexter was convicted on 5 counts of deceiving Congress and sentenced to 6
          months in prison. Both the North and Poindexter convictions were subsequently set aside on the
          grounds that their immunized congressional testimony had been unfairly used against them. In July
          1991, Alan D. Fiers, Jr., chief of CIA covert operations in Central America in 1984-86, admitted
          that he had lied to Congress concerning CIA involvement. Shortly thereafter, his CIA superior Clair
          E. George was indicted for perjury. George's first trial ended in a mistrial. In 1992 former defense
          secretary Caspar Weinberger was indicted on 5 counts of lying to Congress. On Dec. 24, 1992,
          President George BUSH pardoned all the principals charged in the scandal. Walsh's eventual report,
          released in 1994, scored Presidents Reagan and Bush for their roles in events related to the scandal
          but did not charge either with criminal wrongdoing.

          Robert Shogan

          For Further Reading

          Cohen, W. S., and Mitchell, G. J., Men of Zeal (1988)
          Draper, Theodor, A Very Thin Line (1991; repr. 1992)
          Koh, H. H., The National Security Constitution (1990)
          Kornbluh, Peter, ed., The Iran-Contra Scandal: A National Security Documents Reader (1993)

                        | Presidential Scandals | General Articles | The Presidents | GME Contents |


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                             Copyright © 2000 Grolier Incorporated. All rights reserved.


Documents related to the Iran/contra affair

The Contras and Cocaine
This is a portion from the Kerry Cmte. document on Drugs, Law Enforcement and Foreign Policy.
Ollie's Drug Plane
In recent (September '96) days Oliver North has stated that claims of Nicaraguan contra drug running are 'absolute garbage'. A
page from his own notebooks disproves this.
Psychological Operations in Guerilla Warfare
One of the CIA's illegal training manuals for the contras. It advises the "Armed Propaganda Teams" on ways to justify the
assassination of civilians, use blackmail and professional criminals to destabilize a country.
of the Report of the Independent Counsel for Iran/contra matters.
Interim Report to Congress
Judge Walsh's 3rd report to Congress.
The Weinberger Indictment
The first indictment of Defense Secretary Caspar Weinberger.
Government Stipulations
In the trial of Oliver North, the U.S. government acknowledged that the attached 107 statements regarding Iran/contra were
true. Details involvement of foreign countries and the various enticements offered to them to support the contras.

Recommended by

    Pink Noise Home Page


Summary of the Report of the Independent Counsel for Iran/contra matters

Executive Summary

In October and November 1986, two secret U.S. Government operations were publicly exposed, potentially implicating
Reagan Administration officials in illegal activities. These operations were the provision of assistance to the military activities of
the Nicaraguan contra rebels during an October 1984 to October 1986 prohibition on such aid, and the sale of U.S. arms to
Iran in contravention of stated U.S. policy and in possible violation of arms-export controls. In late November 1986, Reagan
Administration officials announced that some of the proceeds from the sale of U.S. arms to Iran had been diverted to the

As a result of the exposure of these operations, Attorney General Edwin Meese III sought the appointment of an independent
counsel to investigate and, if necessary, prosecute possible crimes arising from them.

The Special Division of the United States Court of Appeals for the District of Columbia Circuit appointed Lawrence E. Walsh
as Independent Counsel on December 19, 1986, and charged him with investigating:

(1) the direct or indirect sale, shipment, or transfer since in or about 1984 down to the present, of military arms, materiel, or
funds to the government of Iran, officials of that government, persons, organizations or entities connected with or purporting to
represent that government, or persons located in Iran;

(2) the direct or indirect sale, shipment, or transfer of military arms, materiel or funds to any government, entity, or person
acting, or purporting to act as an intermediary in any transaction referred to above;

(3) the financing or funding of any direct or indirect sale, shipment or transfer referred to above;

(4) the diversion of proceeds from any transaction described above to or for any person, organization, foreign government, or
any faction or body of insurgents in any foreign country, including, but not limited to Nicaragua;

(5) the provision or coordination of support for persons or entities engaged as military insurgents in armed conflict with the
government of Nicaragua since 1984.

This is the final report of that investigation.


Overall Conclusions

The investigations and prosecutions have shown that high-ranking Administration officials violated laws and executive orders in
the Iran/contra matter.

Independent Counsel concluded that:

the sales of arms to Iran contravened United States Government policy and may have violated the Arms Export Control Act1

the provision and coordination of support to the contras violated the Boland Amendment ban on aid to military activities in

the policies behind both the Iran and contra operations were fully reviewed and developed at the highest levels of the Reagan

although there was little evidence of National Security Council level knowledge of most of the actual contra-support operations,
there was no evidence that any NSC member dissented from the underlying policykeeping the contras alive despite
congressional limitations on contra support;

the Iran operations were carried out with the knowledge of, among others, President Ronald Reagan, Vice President George
Bush, Secretary of State George P. Shultz, Secretary of Defense Caspar W. Weinberger, Director of Central Intelligence
William J. Casey, and national security advisers Robert C. McFarlane and John M. Poindexter; of these officials, only
Weinberger and Shultz dissented from the policy decision, and Weinberger eventually acquiesced by ordering the Department
of Defense to provide the necessary arms; and

large volumes of highly relevant, contemporaneously created documents were systematically and willfully withheld from
investigators by several Reagan Administration officials.

following the revelation of these operations in October and November 1986, Reagan Administration officials deliberately
deceived the Congress and the public about the level and extent of official knowledge of and support for these operations.

In addition, Independent Counsel concluded that the off-the-books nature of the Iran and contra operations gave line-level
personnel the opportunity to commit money crimes.



In the course of Independent Counsel's investigation, 14 persons were charged with criminal violations. There were two broad
classes of crimes charged: Operational crimes, which largely concerned the illegal use of funds generated in the course of the
operations, and "cover-up" crimes, which largely concerned false statements and obstructions after the revelation of the
operations. Independent Counsel did not charge violations of the Arms Export Control Act or Boland Amendment. Although
apparent violations of these statutes provided the impetus for the cover-up, they are not criminal statutes and do not contain any
enforcement provisions.

All of the individuals charged were convicted, except for one CIA official whose case was dismissed on national security
grounds and two officials who received unprecedented pre-trial pardons by President Bush following his electoral defeat in
1992. Two of the convictions were reversed on appeal on constitutional grounds that in no way cast doubt on the factual guilt
of the men convicted. The individuals charged and the disposition of their cases are:

(1) Robert C. McFarlane: pleaded guilty to four counts of withholding information from Congress;

(2) Oliver L. North: convicted of altering and destroying documents, accepting an illegal gratuity, and aiding and abetting in the
obstruction of Congress; conviction reversed on appeal;

(3) John M. Poindexter: convicted of conspiracy, false statements, destruction and removal of records, and obstruction of
Congress; conviction reversed on appeal;

(4) Richard V. Secord: pleaded guilty to making false statements to Congress;

(5) Albert Hakim: pleaded guilty to supplementing the salary of North;

(6) Thomas G. Clines: convicted of four counts of tax-related offenses for failing to report income from the operations;

(7) Carl R. Channell: pleaded guilty to conspiracy to defraud the United States;

(8) Richard R. Miller: pleaded guilty to conspiracy to defraud the United States;

(9) Clair E. George: convicted of false statements and perjury before Congress;

(10) Duane R. Clarridge: indicted on seven counts of perjury and false statements; pardoned before trial by President Bush;

(11) Alan D. Fiers, Jr.: pleaded guilty to withholding information from Congress;

(12) Joseph F. Fernandez: indicted on four counts of obstruction and false statements; case dismissed when Attorney General
Richard L. Thornburgh refused to declassify information needed for his defense;

(13) Elliott Abrams: pleaded guilty to withholding information from Congress;

(14) Caspar W. Weinberger: charged with four counts of false statements and perjury; pardoned before trial by President

At the time President Bush pardoned Weinberger and Clarridge, he also pardoned George, Fiers, Abrams, and McFarlane.


The Basic Facts of Iran/contra

The Iran/contra affair concerned two secret Reagan Administration policies whose operations were coordinated by National
Security Council staff. The Iran operation involved efforts in 1985 and 1986 to obtain the release of Americans held hostage in
the Middle East through the sale of U.S. weapons to Iran, despite an embargo on such sales. The contra operations from 1984
through most of 1986 involved the secret governmental support of contra military and paramilitary activities in Nicaragua,
despite congressional prohibition of this support.

The Iran and contra operations were merged when funds generated from the sale of weapons to Iran were diverted to support
the contra effort in Nicaragua. Although this "diversion" may be the most dramatic aspect of Iran/contra, it is important to
emphasize that both the Iran and contra operations, separately, violated United States policy and law.2 The ignorance of the
"diversion" asserted by President Reagan and his Cabinet officers on the National Security Council in no way absolves them of
responsibility for the underlying Iran and contra operations.

The secrecy concerning the Iran and contra activities was finally pierced by events that took place thousands of miles apart in
the fall of 1986. The first occurred on October 5, 1986, when Nicaraguan government soldiers shot down an American cargo
plane that was carrying military supplies to contra forces; the one surviving crew member, American Eugene Hasenfus, was
taken into captivity and stated that he was employed by the CIA. A month after the Hasenfus shootdown, President Reagan's
secret sale of U.S. arms to Iran was reported by a Lebanese publication on November 3. The joining of these two operations
was made public on November 25, 1986, when Attorney General Meese announced that Justice Department officials had
discovered that some of the proceeds from the Iran arms sales had been diverted to the contras.

When these operations ended, the exposure of the Iran/contra affair generated a new round of illegality. Beginning with the
testimony of Elliott Abrams and others in October 1986 and continuing through the public testimony of Caspar W. Weinberger
on the last day of the congressional hearings in the summer of 1987, senior Reagan Administration officials engaged in a
concerted effort to deceive Congress and the public about their knowledge of and support for the operations.

Independent Counsel has concluded that the President's most senior advisers and the Cabinet members on the National
Security Council participated in the strategy to make National Security staff members McFarlane, Poindexter and North the
scapegoats whose sacrifice would protect the Reagan Administration in its final two years. In an important sense, this strategy
succeeded. Independent Counsel discovered much of the best evidence of the cover-up in the final year of active investigation,
too late for most prosecutions.


Scope of Report

This report provides an account of the Independent Counsel's investigation, the prosecutions, the basis for decisions not to
prosecute, and overall observations and conclusions on the Iran/contra matters.

Part I of the report sets out the underlying facts of the Iran and contra operations. Part II describes the criminal investigation of
those underlying facts. Part III provides an analysis of the central operational conspiracy. Parts IV through IX are agency-level
reports of Independent Counsel's investigations and cases: the National Security staff, the private operatives who assisted the
NSC staff, Central Intelligence Agency officials, Department of State officials, and White House officials and Attorney General
Edwin Meese III.

Volume I of this report concludes with a chapter concerning political oversight and the rule of law, and a final chapter containing
Independent Counsel's observations. Volume II of the report contains supporting documentation. Volume III is a classified

Because many will read only sections of the report, each has been written with completeness, even though this has resulted in
repetition of factual statements about central activities.


The Operational Conspiracy

The operational conspiracy was the basis for Count One of the 23-count indictment returned by the Grand Jury March 16,
1988, against Poindexter, North, Secord, and Hakim. It charged the four with conspiracy to defraud the United States by

(1) supporting military operations in Nicaragua in defiance of congressional controls;

(2) using the Iran arms sales to raise funds to be spent at the direction of North, rather than the U.S. Government; and

(3) endangering the Administration's hostage-release effort by overcharging Iran for the arms to generate unauthorized profits to
fund the contras and for other purposes.

The charge was upheld as a matter of law by U.S. District Judge Gerhard A. Gesell even though the Justice Department, in a
move that Judge Gesell called "unprecedented," filed an amicus brief supporting North's contention that the charge should be
dismissed. Although Count One was ultimately dismissed because the Reagan Administration refused to declassify information
necessary to North's defense, Judge Gesell's decision established that high Government officials who engage in conspiracy to
subvert civil laws and the Constitution have engaged in criminal acts. Trial on Count One would have disclosed the
Government-wide activities that supported North's Iran and contra operations.

Within the NSC, McFarlane pleaded guilty in March 1988 to four counts of withholding information from Congress in
connection with his denials that North was providing the contras with military advice and assistance. McFarlane, in his plea
agreement, promised to cooperate with Independent Counsel by providing truthful testimony in subsequent trials.

Judge Gesell ordered severance of the trials of the four charged in the conspiracy indictment because of the immunized
testimony given by Poindexter, North and Hakim to Congress. North was tried and convicted by a jury in May 1989 of altering
and destroying documents, accepting an illegal gratuity and aiding and abetting in the obstruction of Congress. His conviction
was reversed on appeal in July 1990 and charges against North were subsequently dismissed in September 1991 on the
ground that trial witnesses were tainted by North's nationally televised, immunized testimony before Congress. Poindexter in
April 1990 was convicted by a jury on five felony counts of conspiracy, false statements, destruction and removal of records
and obstruction of Congress. The Court of Appeals reversed his conviction in November 1991 on the immunized testimony


The Flow of Funds


The illegal activities of the private citizens involved with the North and Secord operations are discussed in detail in Part V. The
off-the-books conduct of the two highly secret operations circumvented normal Administration accountability and congressional
oversight associated with covert ventures and presented fertile ground for financial wrongdoing. There were several funding
sources for the contras' weapons purchases from the covert-action Enterprise formed by North, Secord and Hakim:

(1) donations from foreign countries;

(2) contributions from wealthy Americans sympathetic to President Reagan's contra support policies; and

(3) the diversion of proceeds from the sale of arms to Iran.

Ultimately, all of these funds fell under the control of North, and through him, Secord and Hakim.

North used political fundraisers Carl R. Channell and Richard R. Miller to raise millions of dollars from wealthy Americans,
illegally using a tax-exempt organization to do so. These funds, along with the private contributions, were run through a network
of corporations and Swiss bank accounts put at North's disposal by Secord and Hakim, through which transactions were
concealed and laundered. In late 1985 through 1986 the Enterprise became centrally involved in the arms sales to Iran. As a
result of both the Iran and contra operations, more than $47 million flowed through Enterprise accounts.

Professional fundraisers Channell and Miller pleaded guilty in the spring of 1987 to conspiracy to defraud the Government by
illegal use of a tax-exempt foundation to raise contributions for the purchase of lethal supplies for the contras. They named
North as an unindicted co-conspirator.

Secord pleaded guilty in November 1989 to a felony, admitting that he falsely denied to Congress that North had personally
benefited from the Enterprise. Hakim pleaded guilty to the misdemeanor count of supplementing the salary of North. Lake
Resources Inc., the company controlled by Hakim to launder the Enterprise's money flow, pleaded guilty to the corporate
felony of theft of Government property in diverting the proceeds from the arms sales to the contras and for other unauthorized
purposes. Thomas G. Clines was convicted in September 1990 of four tax-related felonies for failing to report all of his income
from the Enterprise.


Agency Support of the Operations

Following the convictions of those who were most central to the Iran/contra operations, Independent Counsel's investigation
focused on the supporting roles played by Government officials in other agencies and the supervisory roles of the NSC
principals. The investigation showed that Administration officials who claimed initially that they had little knowledge about the
Iran arms sales or the illegal contra-resupply operation North directed were much better informed than they professed to be.
The Office of Independent Counsel obtained evidence that Secretaries Weinberger and Shultz and White House Chief of Staff
Donald T. Regan, among others, held back information that would have helped Congress obtain a much clearer view of the
scope of the Iran/contra matter. Contemporaneous notes of Regan and Weinberger, and those dictated by Shultz, were
withheld until they were obtained by Independent Counsel in 1991 and 1992.


The White House and Office of the Vice President

As the White House section of this report describes in detail, the investigation found no credible evidence that President Reagan
violated any criminal statute. The OIC could not prove that Reagan authorized or was aware of the diversion or that he had
knowledge of the extent of North's control of the contra-resupply network. Nevertheless, he set the stage for the illegal
activities of others by encouraging and, in general terms, ordering support of the contras during the October 1984 to October
1986 period when funds for the contras were cut off by the Boland Amendment, and in authorizing the sale of arms to Iran, in
contravention of the U.S. embargo on such sales. The President's disregard for civil laws enacted to limit presidential actions
abroadspecifically the Boland Amendment, the Arms Export Control Act and congressional-notification requirements in
covert-action lawscreated a climate in which some of the Government officers assigned to implement his policies felt
emboldened to circumvent such laws.

President Reagan's directive to McFarlane to keep the contras alive "body and soul" during the Boland cut-off period was
viewed by North, who was charged by McFarlane to carry out the directive, as an invitation to break the law. Similarly,
President Reagan's decision in 1985 to authorize the sale of arms to Iran from Israeli stocks, despite warnings by Weinberger
and Shultz that such transfers might violate the law, opened the way for Poindexter's subsequent decision to authorize the
diversion. Poindexter told Congress that while he made the decision on his own and did not tell the President, he believed the
President would have approved. North testified that he believed the President authorized it.

Independent Counsel's investigation did not develop evidence that proved that Vice President Bush violated any criminal
statute. Contrary to his public pronouncements, however, he was fully aware of the Iran arms sales. Bush was regularly briefed,
along with the President, on the Iran arms sales, and he participated in discussions to obtain third-country support for the
contras. The OIC obtained no evidence that Bush was aware of the diversion. The OIC learned in December 1992 that Bush
had failed to produce a diary containing contemporaneous notes relevant to Iran/contra, despite requests made in 1987 and
again in early 1992 for the production of such material. Bush refused to be interviewed for a final time in light of evidence
developed in the latter stages of OIC's investigation, leaving unresolved a clear picture of his Iran/contra involvement. Bush's
pardon of Weinberger on December 24, 1992 pre-empted a trial in which defense counsel indicated that they intended to call
Bush as a witness.

The chapters on White House Chief of Staff Regan and Attorney General Edwin Meese III focus on their actions during the
November 1986 period, as the President and his advisers sought to control the damage caused by the disclosure of the Iran
arms sales. Regan in 1992 provided Independent Counsel with copies of notes showing that Poindexter and Meese attempted
to create a false account of the 1985 arms sales from Israeli stocks, which they believed were illegal, in order to protect the
President. Regan and the other senior advisers did not speak up to correct the false version of events. No final legal
determination on the matter had been made. Regan said he did not want to be the one who broke the silence among the
President's senior advisers, virtually all of whom knew the account was false.

The evidence indicates that Meese's November 1986 inquiry was more of a damage-control exercise than an effort to find the
facts. He had private conversations with the President, the Vice President, Poindexter, Weinberger, Casey and Regan without
taking notes. Even after learning of the diversion, Meese failed to secure records in NSC staff offices or take other prudent
steps to protect potential evidence. And finally, in reporting to the President and his senior advisers, Meese gave a false
account of what he had been told by stating that the President did not know about the 1985 HAWK shipments, which Meese
said might have been illegal. The statute of limitations had run on November 1986 activities before OIC obtained its evidence.
In 1992, Meese denied recollection of the statements attributed to him by the notes of Weinberger and Regan. He was
unconvincing, but the passage of time would have been expected to raise a reasonable doubt of the intentional falsity of his
denials if he had been prosecuted for his 1992 false statements.


The Role of CIA Officials

Director Casey's unswerving support of President Reagan's contra policies and of the Iran arms sales encouraged some CIA
officials to go beyond legal restrictions in both operations. Casey was instrumental in pairing North with Secord as a
contra-support team when the Boland Amendment in October 1984 forced the CIA to refrain from direct or indirect aid. He
also supported the North-Secord combination in the Iran arms sales, despite deep reservations about Secord within the CIA

Casey's position on the contras prompted the chief of the CIA's Central American Task Force, Alan D. Fiers, Jr., to "dovetail"
CIA activities with those of North's contra-resupply network, in violation of Boland restrictions. Casey's support for the NSC
to direct the Iran arms sales and to use arms dealer Manucher Ghorbanifar and Secord in the operation, forced the CIA's
Directorate of Operations to work with people it distrusted.

Following the Hasenfus shootdown in early October 1986, George and Fiers lied to Congress about U.S. Government
involvement in contra resupply, to, as Fiers put it, "keep the spotlight off the White House." When the Iran arms sales became
public in November 1986, three of Casey's key officersGeorge, Clarridge and Fiersfollowed Casey's lead in misleading

Four CIA officials were charged with criminal offensesGeorge, the deputy director for operations and the third highest-ranking
CIA official; Clarridge, chief of the European Division; Fiers; and Fernandez. George was convicted of two felony counts of
false statements and perjury before Congress. Fiers pleaded guilty to two misdemeanor counts of withholding information from
Congress. The four counts of obstruction and false statements against Fernandez were dismissed when the Bush Administration
refused to declassify information needed for his defense. Clarridge was awaiting trial on seven counts of perjury and false
statements when he, George and Fiers were pardoned by President Bush.


State Department Officials

In 1990 and 1991, Independent Counsel received new documentary evidence in the form of handwritten notes suggesting that
Secretary Shultz's congressional testimony painted a misleading and incorrect picture of his knowledge of the Iran arms sales.
The subsequent investigation focused on whether Shultz or other Department officials deliberately misled or withheld
information from congressional or OIC investigators.

The key notes, taken by M. Charles Hill, Shultz's executive assistant, were nearly verbatim, contemporaneous accounts of
Shultz's meetings within the department and Shultz's reports to Hill on meetings the secretary attended elsewhere. The Hill notes
and similarly detailed notes by Nicholas Platt, the State Department's executive secretary, provided the OIC with a detailed
account of Shultz's knowledge of the Iran arms sales. The most revealing of these notes were not provided to any Iran/contra
investigation until 1990 and 1991. The notes show thatcontrary to his early testimony that he was not aware of details of the
1985 arms transfersShultz knew that the shipments were planned and that they were delivered. Also in conflict with his
congressional testimony was evidence that Shultz was aware of the 1986 shipments.

Independent Counsel concluded that Shultz's early testimony was incorrect, if not false, in significant respects, and misleading, if
literally true, in others. When questioned about the discrepancies in 1992, Shultz did not dispute the accuracy of the Hill notes.
He told OIC that he believed his testimony was accurate at the time and he insisted that if he had been provided with the notes
earlier, he would have testified differently. Independent Counsel declined to prosecute because there was a reasonable doubt
that Shultz's testimony was willfully false at the time it was delivered.

Independent Counsel concluded that Hill had willfully withheld relevant notes and prepared false testimony for Shultz in 1987.
He declined to prosecute because Hill's claim of authorization to limit the production of his notes and the joint responsibility of
Shultz for the resulting misleading testimony, would at trial have raised a reasonable doubt, after Independent Counsel had
declined to prosecute Shultz.

Independent Counsel's initial focus on the State Department had centered on Assistant Secretary Elliott Abrams' insistence to
Congress and to the OIC that he was not aware of North's direction of the extensive contra-resupply network in 1985 and
1986. As assistant secretary of state for inter-American affairs, Abrams chaired the Restricted Inter-Agency Group, or RIG,
which coordinated U.S. policy in Central America. Although the OIC was skeptical about Abrams' testimony, there was
insufficient evidence to proceed against him until additional documentary evidence inculpating him was discovered in 1990 and
1991, and until Fiers, who represented the CIA on the RIG, pleaded guilty in July 1991 to withholding information from
Congress. Fiers provided evidence to support North's earlier testimony that Abrams was knowledgeable about North's
contra-supply network. Abrams pleaded guilty in October 1991 to two counts of withholding information from Congress about
secret Government efforts to support the contras, and about his solicitation of $10 million to aid the contras from the Sultan of


Secretary Weinberger and Defense Department Officials

Contrary to their testimony to the presidentially appointed Tower Commission and the Select Iran/contra Committees of
Congress, Independent Counsel determined that Secretary Weinberger and his closest aides were consistently informed of
proposed and actual arms shipments to Iran during 1985 and 1986. The key evidence was handwritten notes of Weinberger,
which he deliberately withheld from Congress and the OIC until they were discovered by Independent Counsel in late 1991.
The Weinberger daily diary notes and notes of significant White House and other meetings contained highly relevant,
contemporaneous information that resolved many questions left unanswered in early investigations.

The notes demonstrated that Weinberger's early testimonythat he had only vague and generalized information about Iran arms
sales in 1985was false, and that he in fact had detailed information on the proposed arms sales and the actual deliveries. The
notes also revealed that Gen. Colin Powell, Weinberger's senior military aide, and Richard L. Armitage, assistant secretary of
defense for international security affairs, also had detailed knowledge of the 1985 shipments from Israeli stocks. Armitage and
Powell had testified that they did not learn of the November 1985 HAWK missile shipment until 1986.

Weinberger's notes provided detailed accounts of high-level Administration meetings in November 1986 in which the
President's senior advisers were provided with false accounts of the Iran arms sales to protect the President and themselves
from the consequences of the possibly illegal 1985 shipments from Israeli stocks.

Weinberger's notes provided key evidence supporting the charges against him, including perjury and false statements in
connection with his testimony regarding the arms sales, his denial of the existence of notes and his denial of knowledge of Saudi
Arabia's multi-million dollar contribution to the contras. He was pardoned less than two weeks before trial by President Bush
on December 24, 1992.

There was little evidence that Powell's early testimony regarding the 1985 shipments and Weinberger's notes was willfully false.
Powell cooperated with the various Iran/contra investigations and, when his recollection was refreshed by Weinberger's notes,
he readily conceded their accuracy. Independent Counsel declined to prosecute Armitage because the OIC's limited resources
were focused on the case against Weinberger and because the evidence against Armitage, while substantial, did not reach the
threshold of proof beyond a reasonable doubt.


The Reagan, Bush and Casey Segments

The Independent Counsel Act requires a report as to persons not indicted as well as those indicted. Because of the large
number of persons investigated, those discussed in individual sections of this report are limited to those as to whom there was a
possibility of indictment. In addition there are separate sections on President Reagan and President Bush because, although
criminal proceedings against them were always unlikely, they were important subjects of the investigation, and their activities
were important to the action taken with respect to others.

CIA Director Casey is a special case. Because Casey was hospitalized with a fatal illness before Independent Counsel was
appointed, no formal investigation of Casey was ever undertaken by the OIC. Casey was never able to give his account, and
he was unable to respond to allegations of wrongdoing made about him by others, most prominently North, whose veracity is
subject to serious question. Equally important, fundamental questions could not be answered regarding Casey's state of mind,
the impact, if any, of his fatal illness on his conduct and his intent.

Under normal circumstances, a prosecutor would hesitate to comment on the conduct of an individual whose activities and
actions were not subjected to rigorous investigation, which might exculpate that individual. Nevertheless, after serious
deliberation, Independent Counsel concluded that it was in the public interest that this report expose as full and complete an
account of the Iran/contra matter as possible. This simply could not be done without an account of the role of Director Casey.


Observations and Conclusions

This report concludes with Independent Counsel's observations and conclusions. He observes that the governmental problems
presented by Iran/contra are not those of rogue operations, but rather those of Executive Branch efforts to evade congressional
oversight. As this report documents, the competing roles of the attorney generaladviser to the President and top
law-enforcement officercome into irreconcilable conflict in the case of high-level Executive Branch wrongdoing. Independent
Counsel concludes that congressional oversight alone cannot correct the deficiencies that result when an attorney general
abandons the law-enforcement responsibilities of that office and undertakes, instead, to protect the President.

Independent Counsel asks the Congress to review the difficult and delicate problem posed to the investigations and
prosecutions by congressional grants of immunity to principals. While recognizing the important responsibility of Congress for
investigating such matters thoroughly, Congress must realize that grants of use immunity to principals in such highly exposed
matters as the Iran/contra affair will virtually rule out successful prosecution.

Independent Counsel also addresses the problem of implementing the Classified Information Procedures Act (CIPA) in cases
steeped in highly classified information, such as many of the Iran/contra prosecutions. Under the Act, the attorney general has
unrestricted discretion to decide whether to declassify information necessary for trial, even in cases in which Independent
Counsel has been appointed because of the attorney general's conflict of interest. This discretion is inconsistent with the
perceived need for independent counsel, particularly in cases in which officers of the intelligence agencies that classify
information are under investigation. This discretion gives the attorney general the power to block almost any potentially
embarrassing prosecution that requires the declassification of information. Independent Counsel suggests that the attorney
general implement standards that would permit independent review of a decision to block a prosecution of an officer within the
Executive Branch and legitimate congressional oversight.


Classified Information

In addition to the unclassified Volumes I and II of this report, a brief classified report, Volume III, has been filed with the
Special Division. The classified report contains references to material gathered in the investigation of Iran/contra that could not
be declassified and could not be concealed by some substitute form of discussion.


Summary of Prosecutions

After Independent Counsel Lawrence E. Walsh's appointment in December 1986, 14 persons were charged with criminal
offenses. Eleven persons were convicted, but two convictions were overturned on appeal. Two persons were pardoned before
trial and one case was dismissed when the Bush Administration declined to declassify information necessary for trial. On
December 24, 1992, President Bush pardoned Caspar W. Weinberger, Duane R. Clarridge, Clair E. George, Elliott Abrams,
Alan D. Fiers, Jr., and Robert C. McFarlane.


Completed Trials and Pleas

Elliott Abrams - Pleaded guilty October 7, 1991, to two misdemeanor charges of withholding information from Congress
about secret government efforts to support the Nicaraguan contra rebels during a ban on such aid. U.S. District Chief Judge
Aubrey E. Robinson, Jr., sentenced Abrams November 15, 1991, to two years probation and 100 hours community service.
Abrams was pardoned December 24, 1992.

Carl R. Channell - Pleaded guilty April 29, 1987, to one felony count of conspiracy to defraud the United States. U.S.
District Judge Stanley S. Harris sentenced Channell on July 7, 1989, to two years probation.

Thomas G. Clines - Indicted February 22, 1990, on four felony counts of underreporting his earnings to the IRS in the 1985
and 1986 tax years; and falsely stating on his 1985 and 1986 tax returns that he had no foreign financial accounts. On
September 18, 1990, Clines was found guilty of all charges. U.S. District Judge Norman P. Ramsey in Baltimore, Md., on
December 13, 1990, sentenced Clines to 16 months in prison and $40,000 in fines. He was ordered to pay the cost of the
prosecution. The Fourth Circuit U.S. Court of Appeals in Richmond, Va., on February 27, 1992, upheld the convictions.
Clines served his prison sentence.

Alan D. Fiers, Jr. - Pleaded guilty July 9, 1991, to two misdemeanor counts of withholding information from Congress about
secret efforts to aid the Nicaraguan contras. U.S. District Chief Judge Aubrey E. Robinson, Jr., sentenced Fiers January 31,
1992, to one year probation and 100 hours community service. Fiers was pardoned December 24, 1992.

Clair E. George - Indicted September 6, 1991, on 10 counts of perjury, false statements and obstruction in connection with
congressional and Grand Jury investigations. George's trial on nine counts ended in a mistrial on August 26, 1992. Following a
second trial on seven counts, George was found guilty December 9, 1992, of two felony charges of false statements and
perjury before Congress. The maximum penalty for each count was five years in prison and $250,000 in fines. U.S. District
Judge Royce C. Lamberth set sentencing for February 18, 1993. George was pardoned on December 24, 1992, before
sentencing occurred.

Albert Hakim - Pleaded guilty November 21, 1989, to a misdemeanor of supplementing the salary of Oliver L. North. Lake
Resources Inc., in which Hakim was the principal shareholder, pleaded guilty to a corporate felony of theft of government
property in diverting Iran arms sales proceeds to the Nicaraguan contras and other activities. Hakim was sentenced by U.S.
District Judge Gerhard A. Gesell on February 1, 1990, to two years probation and a $5,000 fine; Lake Resources was
ordered dissolved.

Robert C. McFarlane - Pleaded guilty March 11, 1988, to four misdemeanor counts of withholding information from
Congress. U.S. District Chief Judge Aubrey E. Robinson, Jr., sentenced McFarlane on March 3, 1989, to two years
probation, $20,000 in fines and 200 hours community service. McFarlane was pardoned December 24, 1992.

Richard R. Miller - Pleaded guilty May 6, 1987, to one felony count of conspiracy to defraud the United States. U.S.
District Judge Stanley S. Harris sentenced Miller on July 6, 1989, to two years probation and 120 hours of community service.

Oliver L. North - Indicted March 16, 1988, on 16 felony counts. After standing trial on 12, North was convicted May 4,
1989 of three charges: accepting an illegal gratuity, aiding and abetting in the obstruction of a congressional inquiry, and
destruction of documents. He was sentenced by U.S. District Judge Gerhard A. Gesell on July 5, 1989, to a three-year
suspended prison term, two years probation, $150,000 in fines and 1,200 hours community service. A three-judge appeals
panel on July 20, 1990, vacated North's conviction for further proceedings to determine whether his immunized testimony
influenced witnesses in the trial. The Supreme Court declined to review the case. Judge Gesell dismissed the case September
16, 1991, after hearings on the immunity issue, on the motion of Independent Counsel.

John M. Poindexter - Indicted March 16, 1988, on seven felony charges. After standing trial on five charges, Poindexter was
found guilty April 7, 1990, on all counts: conspiracy (obstruction of inquiries and proceedings, false statements, falsification,
destruction and removal of documents); two counts of obstruction of Congress and two counts of false statements. U.S.
District Judge Harold H. Greene sentenced Poindexter June 11, 1990, to six months in prison on each count, to be served
concurrently. A three-judge appeals panel on November 15, 1991, reversed the convictions on the ground that Poindexter's
immunized testimony may have influenced the trial testimony of witnesses. The Supreme Court on December 7, 1992, declined
to review the case. In 1993, the indictment was dismissed on the motion of Independent Counsel.

Richard V. Secord - Indicted March 16, 1988 on six felony charges. On May 11, 1989, a second indictment was issued
charging nine counts of impeding and obstructing the Select Iran/contra Committees. Secord was scheduled to stand trial on 12
charges. He pleaded guilty November 8, 1989, to one felony count of false statements to Congress. Secord was sentenced by
U.S. District Chief Judge Aubrey E. Robinson, Jr., on January 24, 1990, to two years probation.


Pre-trial Pardons

Duane R. Clarridge - Indicted November 26, 1991, on seven counts of perjury and false statements about a secret shipment
of U.S. HAWK missiles to Iran. The maximum penalty for each count was five years in prison and $250,000 in fines. U.S.
District Judge Harold H. Greene set a March 15, 1993, trial date. Clarridge was pardoned December 24, 1992.

Caspar W. Weinberger - Indicted June 16, 1992, on five counts of obstruction, perjury and false statements in connection
with congressional and Independent Counsel investigations of Iran/ contra. On September 29, the obstruction count was
dismissed. On October 30, a second indictment was issued, charging one false statement count. The second indictment was
dismissed December 11, leaving four counts remaining. The maximum penalty for each count was five years in prison and
$250,000 in fines. U.S. District Judge Thomas F. Hogan set a January 5, 1993, trial date. Weinberger was pardoned
December 24, 1992.



Joseph F. Fernandez - Indicted June 20, 1988 on five counts of conspiracy to defraud the United States, obstructing the
inquiry of the Tower Commission and making false statements to government agencies. The case was dismissed in the District
of Columbia for venue reasons on the motion of Independent Counsel. A four-count indictment was issued in the Eastern
District of Virginia on April 24, 1989. U.S. District Judge Claude M. Hilton dismissed the four-count case November 24,
1989, after Attorney General Richard Thornburgh blocked the disclosure of classified information ruled relevant to the defense.
The U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., on September 6, 1990, upheld Judge Hilton's rulings
under the Classified Information Procedures Act (CIPA). On October 12, 1990, the Attorney General filed a final declaration
that he would not disclose the classified information.


See also CIABASE and more Iran/contra information

Selections from the Senate Committee Report on Drugs, Law Enforcement and Foreign Policy

chaired by Senator John F. Kerry

          C. DIACSA
          D. VORTEX



The initial Committee investigation into the international drug trade, which began in April, 1986, focused on allegations that
Senator John F. Kerry had received of illegal gun-running and narcotics trafficking associated with the Contra war against

As the Committee proceeded with its investigation, significant information began surfacing concerning the operations of
international narcotics traffickers, particularly relating to the Colombian-based cocaine cartels. As a result, the decision was
made to incorporate the Contra-related allegations into a broader investigation concerning the relationship between foreign
policy, narcotics trafficking and law enforcement.

While the contra/drug question was not the primary focus of the investigation, the Subcommittee uncovered considerable
evidence relating to the Contra network which substantiated many of the initial allegations laid out before the Committee in the
Spring of 1986. On the basis of this evidence, it is clear that individuals who provided support for the Contras were involved in
drug trafficking, the supply network of the Contras was used by drug trafficking organizations, and elements of the Contras
themselves knowingly received financial and material assistance from drug traffickers. In each case, one or another agency of
the U.S. government had information regarding the involvement either while it was occurring, or immediately thereafter.

The Subcommittee found that the Contra drug links included:

--Involvement in narcotics trafficking by individuals associated with the Contra movement.

--Participation of narcotics traffickers in Contra supply operations through business relationships with Contra organizations.

--Provision of assistance to the Contras by narcotics traffickers, including cash, weapons, planes, pilots, air supply services and
other materials, on a voluntary basis by the traffickers.

--Payments to drug traffickers by the U.S. State Department of funds authorized by the Congress for humanitarian assistance to
the Contras, in some cases after the traffickers had been indicted by federal law enforcement agencies on drug charges, in
others while traffickers were under active investigation by these same agencies.

These activities were carried out in connection with Contra activities in both Costa Rica and Honduras.

The Subcommittee found that the links that were forged between the Contras and the drug traffickers were primarily pragmatic,
rather than ideological. The drug traffickers, who had significant financial and material resources, needed the cover of legitimate
activity for their criminal enterprises. A trafficker like George Morales hoped to have his drug indictment dropped in return for
his financial and material support of the Contras. Others, in the words of Marcos Aguado, Eden Pastora's air force chief:

... took advantage of the anti-communist sentiment which existed in Central America ... and they undoubtedly used it for drug

While for some Contras, it was a matter of survival, for the traffickers it was just another business deal to promote and protect
their own operations.


In the wake of press accounts concerning links between the Contras and drug traffickers' beginning December, 1985 with a
story by the Associated Press, both Houses of the Congress began to raise questions about the drug-related allegations
associated with the Contras, causing a review in the spring of 1986 of the allegations by the State Department, in conjunction
with the Justice Department and relevant U.S. intelligence agencies.

Following that review, the State Department told the Congress in April, 1986 that it had at that time "evidence of a limited
number of incidents in which known drug traffickers tried to establish connections with Nicaraguan resistance groups."

According to the Department, "... these attempts for the most part took place during the period when the resistance was
receiving no U.S. funding and was particularly hard pressed for financial support." The report acknowledged that, "... drug
traffickers were attempting to exploit the desperate conditions," in which the Contras found themselves.[2] The Department had
suggested that while "individual members" of the Contra movement might have been involved, their drug trafficking was "...
without the authorization of resistance leaders."[3]

Following further press reports linking contra supply operations to narcotics, and inquiries from the Foreign Relations
Committee to the State Department concerning these links, the State Department issued a second statement to the Congress
concerning the allegations on July 24, 1986.

In this report, the State Department said, "... the available evidence points to involvement with drug traffickers by a limited
number of persons having various kinds of affiliations with, or political sympathies for, the resistance groups."[4]

A year later, in August 1987, the CIA's Central American Task Force Chief became the first U.S. official to revise that
assessment to suggest instead that the links between Contras on the Southern Front in Costa Rica to narcotics trafficking was in
fact far broader than that acknowledged by the State Department in 1986.

Appearing before the Iran-Contra Committees' the CIA Central American Task Force chief testified:With respect to (drug
trafficking by) the Resistance Forces ... it is not a couple of people. It is a lot of people.[5]

The CIA's Chief of the Central American Task Force went on to say:

We knew that everybody around Pastora was involved in cocaine ... His staff and friends (redacted) they were drug smugglers
or involved in drug smuggling.[6]

The Justice Department was slow to respond to the allegations regarding links between drug traffickers and the Contras. In the
spring of 1986, even after the State Department was acknowledging there were problems with drug trafficking in association
with Contra activities on the Southern Front, the Justice Department was adamantly denying that there was any substance to the
narcotics allegations. At the time, the FBI had significant information regarding the involvement of narcotics traffickers in Contra
operations and Neutrality Act violations.[7]

The failure of U.S. law enforcement and intelligence agencies to respond properly to allegations concerning criminal activity
relating to the Contras was demonstrated by the handling of the Committee's own investigation by the Justice Department and
the CIA in the spring of 1986.

On May 6, 1986, a bipartisan group of Committee staff met with representatives of the Justice Department, FBI, DEA, CIA
and State Department to discuss the allegations that Senator Kerry had received information of Neutrality Act violations, gun
running and drug trafficking in association with Contra organizations based on the Southern Front in Costa Rica.

In the days leading up to the meeting, Justice Department spokesmen were stating publicly that "the FBI had conducted an
inquiry into all of these charges and none of them have any substance."[8] At that meeting, Justice Department officials privately
contradicted the numerous public statements from the Department that these allegations had been investigated thoroughly and
were determined to be without foundation. The Justice Department officials at the meeting said the public statements by Justice
were "inaccurate."[9] The Justice officials confirmed there were ongoing Neutrality Act investigations in connection with the
allegations raised by Senator Kerry.

At the same meeting, representatives of the CIA categorically denied that the Neutrality Act violations raised by the Committee
staff had in fact taken place, citing classified documents which the CIA did not make available to the Committee. In fact, at the
time, the FBI had already assembled substantial information confirming the Neutrality Act violations, including admissions by
some of the persons involved indicating that crimes had taken place. [10]

In August 1986, Senator Richard Lugar, then-Chairman of the Committee and the ranking member, Senator Claiborne Pell,
wrote the Justice Department requesting information on 27 individuals and organizations associated with the contras concerning
allegations of their involvement in narcotics trafficking and illegal gunrunning. The Justice Department refused to provide any
information in response to this request, on the grounds that the information remained under active investigation, and that the
Committee's "rambling through open investigations gravely risks compromising those efforts."[11]

On October 5, 1988, the Subcommittee received sworn testimony from the Miami prosecutor handling the Neutrality and
gun-running cases that he had been advised that some officials in the Justice Department had met in 1986 to discuss how "to
undermine" Senator Kerry's attempts to have hearings regarding the allegations.[12]

The Subcommittee took a number of depositions of Justice Department personnel involved in responding to the Committee
investigation or in prosecuting allegations stemming from the Committee's investigation. Each denied participating in any
agreement to obstruct or interfere with a Congressional investigation. In order to place in their proper perspective the attempts
to interfere with' or undermine, the Committee investigation, a lengthy chronology has been prepared which appears at
appendix A of this report.


Covert war, insurgency and drug trafficking frequently go hand-in-hand without regard to ideology or sponsorship. General
Paul Gorman, testified that the use of narcotics profits by armed resistance groups was commonplace. Gorman stated further
that: "If you want to move arms or munitions in Latin America, the established networks are owned by the cartels. It has lent
itself to the purposes of terrorists, of saboteurs, of spies, of insurgents and subversions."[13]

DEA Assistant Administrator David Westrate said of the Nicaraguan war:

It is true that people on both sides of the equation (in the Nicaraguan war) were drug traffickers, and a couple of them were
pretty signficant.[14]

Drug trafficking associated with revolution in Nicaragua began during the late 1970's with the Sandinistas attempt to overthrow
the regime of Anastasio Somoza Debayle. At the time, the Sandinistas were supported by most governments in the region.
Thosegovernments helped provide the FSLN with the money, weapons, and the sanctuary they needed to overthrow

Costa Rica, which has dozens of unsupervised airstrips near the Nicaraguan border, became an important supply and staging
area for the Sandinistas. These air strips were used by Noriega and others for shipments of weapons to the Sandinistas.[16]

Former senior Costa Rican Law enforcement officials told the Subcommittee they were instructed to keep their narcotics
investigators away from the Nicaraguan border during the Sandinista revolution. Even when they had received hard information
about drugs on the aircraft delivering weapons, the officials, in effort to avoid controversy regarding the war, ignored the tips
and let the flights go. [17]

A number of Costa Ricans became suppliers for the Sandinistas. These included Jaime "Pillique" Guerra, who owned a crop
dusting service and a related aircraft support business in northern Costa Rica. Guerra refueled and repaired the planes which
came from Panama loaded with Cuban weapons for the Sandinistas.[18] Guerra's crop dusting business was excellent cover
for the movement of aviation fuel to the dozens of remote airstrips they used without arousing the suspicions of Costa Rican

When the Sandinista insurgency succeeded in 1979, smuggling activity in northern Costa Rica did not stop. Surplus weapons
originally stored in Costa Rica for use by the Sandinistas were sold on the black market in the region.[19] Some of these
weapons were shipped to the Salvadoran rebels from the same airstrips in the same planes, flown by the same pilots who had
previously worked for the Sandinistas.[20]

Costa Rican law enforcement authorities said that the drug trafficking through northern Costa Rica continued as well. They said
that their police units lacked the men, the communications equipment and the transport to close down the airstrips and seize
weapons and drugs.[21]

Werner Lotz, a Costa Rican pilot serving sentence for drug smuggling, testified that there was little the Costa Rican government
could do to deal with the continuing drug trafficking:

"Costa Rica has got only civil guards, underpaid and easily bought ... To be very clear ... our guard down there is barefoot, and
you're talking about 50 men to cover 400 kilometers maybe." [22]


When the Southern Front against the Sandinista Government in Nicaragua was established in 1983, Costa Rica remained
ill-equipped to deal with the threat posed by the Colombian drug cartels. Then, as now, the country does not have a military, its
law enforcement resources remain limited, and its radar system still so poor that Contra supply planes could fly in and out of the
clandestine strips without being detected.[23]

Following their work on behalf of the Sandinistas and the Salvadoran rebels, the Colombian and Panamanian drug operatives
were well positioned to exploit the infrastructure now serving and supplying the Contra Southern Front. This infrastructure was
increasingly important to the drug traffickers, as this was the very period in which the cocaine trade to the U.S. from Latin
America was growing exponentially.

In the words of Karol Prado, an officer of the ARDE Contra organization of Eden Pastora on the Southern Front, "drug
traffickers ... approaches political groups like ARDE trying to make deals that would somehow camouflage or cover up their

The head of the Costa Rican "air force" and personal pilot to two Costa Rican presidents, Werner Lotz, explained the
involvement of drug traffickers with the Contras in the early days of the establishment of the Southern Front as a consequence
of the Contras lack of resources:

"There was no money. There were too many leaders and too few people to follow them, and everybody was trying to make
money as best they could."[24]

The logic of having drug money pay for the pressing needs of the Contras appealed to a number of people who became
involved in the covert war. Indeed, senior U.S. policy makers were not immune to the idea that drug money was a perfect
solution to the Contra's funding problems.

As DEA officials testified last July before the House Judiciary Subcommittee on Crime, Lt. Col. Oliver North suggested to the
DEA in June 1985 that $1.5 million in drug money carried aboard a plane piloted by DEA informant Barry Seal and generated
in a sting of the Medellin Cartel and Sandinista officials, be provided to the Contras.[25] While the suggestion was rejected by
the DEA, the fact that it was made highlights the potential appeal of drug profits for persons engaged in covert activity.

Lotz said that Contra operations on the Southern Front were in fact funded by drug operations. He testified that weapons for
the Contras came from Panama on small planes carrying mixed loads which included drugs. The pilots unloaded the weapons,
refueled, and headed north toward the U.S. with drugs.[26] The pilots included Americans, Panamanians, and Colombians,
and occasionally, uniformed members of the Panamanian Defense Forces.[27] Drugpilots soon began to use the Contra
airstrips to refuel even when there were no weapons to unload. They knew that the authorities would not check the airstrips
because the war was "protected".[28]

The problem of drug traffickers using the airstrips also used to supply the Contras persisted through 1985 and 1986. By the
summer of 1986, it became of significant concern to the U.S. Government officials who were involved in the covert Contra
supply operations undertaken during the Boland Amendment period. As then-CIA Station Chief, "Thomas Castillo" testified to
the Iran/Contra Committees, U.S. Ambassador to Costa Rica Lewis Tambs wanted to place guards on the secret Contra
supply airstrip at Santa Elena in Costa Rica, to avoid:

having drug traffickers use that site, and this was a continuing concern during the period of June, July and August.[29]

The concern highlights the degree to which the infrastructure used by the Contras and that used by drug traffickers was
potentially interchangeable, even in a situation in which the U.S. government had itself established and maintained the airstrip


Pilots who made combined Contra weapons/drug flights through the Southern Front included:

--Gerardo Duran, a Costa Rican pilot in the airplane parts supply business. Duran flew for a variety of Contra organizations on
the Southern Front' including those affiliated with Alfonso Robelo, Fernando"El Negro"Chamorro, and Eden Pastora, before
U.S. officials insisted that the Contras sever their ties from Duran because of his involvement with drugs. [30] Duran was
convicted of narcotics trafficking in Costa Rica in 1987 and jailed.

--Gary Wayne Betzner, drug pilot who worked for convicted smuggler George Morales. Betzner testified that twice in 1984 he
flew weapons for the Contras from the U.S. to northern Costa Rica and returned to the United States with loads of cocaine.
Betzner is presently serving a lengthy prison term for drug smuggling.[31]

--Jose"Chepon" Robelo, the head of UDN-FARN air force on the Southern front. Robelo turned to narcotics trafficking and
reselling goods provided to the Contras by the U.S.[32]


The State Department selected four companies owned and operated by narcotics traffickers to supply humanitarian assistance
to the Contras. The companies were:--SETCO Air, a company established by Honduran drug trafficker Ramon Matta

--DIACSA, a Miami-based air company operated as the headquarters of a drug trafficker enterprise for convicted drug
traffickers Floyd Carlton and Alfredo Caballero;

--Frigorificos de Puntarenas, a firm owned and operated by Cuban-American drug traffickers;

--Vortex, an air service and supply company partly owned by admitted drug trafficker Michael Palmer.

In each case, prior to the time that the State Department entered into contracts with the company, federal law enforcement had
received information that the individuals controlling these companies were involved in narcotics.

Officials at NHAO told GAO investigators that all the supply contractors were to have been screened by U.S. intelligence and
law enforcement agencies prior to their receiving funds from State Department on behalf of the Contras to insure that they were
not involved with criminal activity.[33] Neither the GAO nor the NHAO were certain whether or not that had actually been

The payments made by the State Department to these four companies between January and August 1986, were as follows:

SETCO, for air transport service.......................$186,924.25
DIACSA, for airplane engine parts........................41,120.90
Frigorificos De Puntarenas, as a broker/supplier for various serv-
 ices to Contras on the Southern Front..................261,932.00
VORTEX, for air transport services......................317,425.17

Total [35] .............................................806,401.20

A number of questions arise as a result of the selection of these four companies by the State Department for the provision of
humanitarian assistance to the contras, to which the Subcommittee has been unable to obtain clear answers:

--Who selected these firms to provide services to the Contras, paid for with public funds, and what criteria were used for
selecting them?

--Were any U.S. officials in the CIA, NSC, or State Department aware of the narcotics allegations associated with any of
these companies? If so, why were these firms permitted to receive public funds on behalf of the Contras?

--Why were Contra suppliers not checked against federal law enforcement records that would have shown them to be either
under active investigation as drug traffickers, or in the case of DIACSA, actually under indictment?

Ambassador Robert Duemling, Director of the Nicaraguan Humanitarian Assistance Organization (NHAO), who was
responsible for the operation of the program, was unable to recall how these companies were selected, when questioned by
Senator Kerry in April, 1988.[36] Ambassador Duemling also could not recall whetheror not the contractors had in fact been
checked against law enforcement records prior to receiving funds from the State Department. In previous testimony before the
Iran/Contra Committees, Ambassador Duemling had recalled that NHAO had been directed by Lt. Col. Oliver North to
continue "the existing arrangements of the resistance movement" in choosing contractors.[37]

At best, these incidents represent negligence on the part of U.S. government officials responsible for providing support to the
Contras. At worst it was a matter of turning a blind eye to the activities of companies who use legitimate activities as a cover for
their narcotics trafficking.


Before being chosen by the State Department to transport goods on behalf of the Contras from late 1985 through mid-1986,
SETCO had a long-standing relationship with the largest of the Contra groups, the Honduras-based FDN. Beginning in 1984,
SETCO was the principal company used by the Contras in Honduras to transport supplies and personnel for the FDN,
carrying at least a million rounds of ammunition, food, uniforms and other military supplies for the Contras from 1983 through
1985. According to testimony before the Iran/Contra Committees by FDN leader Adolfo Calero, SETCO received funds for
Contra supply operations from the contra accounts established by Oliver North.[38]

U.S. law enforcement records state that SETCO was established by Honduran cocaine trafficker Juan Matta Ballesteros,
whose April 1988 extradition from Honduras to the United States in connection with drug trafficking charges caused riots
outside the U.S. Embassy in Tegucigalpa.

For example, a 1983 Customs Investigative Report states that "SETCO stands for Services Ejectutivos Turistas Commander
and is headed by Juan Ramon Mata Ballestros, a class I DEA violator." The same report states that according to the Drug
Enforcement Agency, "SETCO aviation is a corporation formed by American businessmen who are dealing with Matta and are
smuggling narcotics into the United States."[39]

One of the pilots selected to fly Contra supply missions for the FDN for SETCO was Frank Moss, who has been under
investigation as an alleged drug trafficker since 1979. Moss has been investigated, although never indicted, for narcotics
offenses by ten different law enforcement agencies.[40]

In addition to flying Contra supply missions through SETCO, Moss formed his own company in 1985, Hondu Carib, which
also flew supplies to the Contras, including weapons and ammunition purchased from R.M. Equipment, an arms company
controlled by Ronald Martin and James McCoy.[41]The FDN's arrangement with Moss and Hondu Carib was pursuant to a
commercial agreement between the FDN's chief supply officer, Mario Calero, and Moss, under which Calero was to receive
an ownership interest in Moss' company. The Subcommittee received documentation that one Moss plane, a DC-4, N90201,
was used to move Contra goods from the United States to Honduras.[42] On the basis of information alleging that the plane
was being used for drug smuggling, the Customs Service obtained a court order to place a concealed transponder on the

A second DC-4 controlled by Moss was chased off the west coast of Florida by the Customs Service while it was dumping
what appeared to be a load of drugs, according to law enforcement personnel. When the plane landed at Port Charlotte no
drugs were found on board, but the plane's registration was not in order and its last known owners were drug traffickers. Law
enforcement personnel also found an address book aboard the plane, containing among other references the telephone numbers
of some Contra officials and the Virginia telephone number of Robert Owen, Oliver North's courier.[44] A law enforcement
inspection of the plane revealed the presence of significant marijuana residue.[45] DEA seized the aircraft on March 16, 1987.


Frigorificos de Puntarenas is a Costa Rican seafood company which was created as a cover for the laundering of drug money,
according to grand jury testimony by one of its partners, and testimony by Ramon Milian Rodriguez, the convicted money
launderer who established the company.[46]

From its creation, it was operated and owned by Luis Rodriguez of Miami, Florida, and Carlos Soto and Ubaldo Fernandez,
two convicted drug traffickers, to launder drug money.[47] Luis Rodriguez, who according to Massachusetts law enforcement
officials directed the largest marijuana smuggling ring in the history of the state, was indicted on drug trafficking charges by the
federal government on September 30, 1987 and on tax evasion in connection with the laundering of money through Ocean
Hunter on April 5,1988.[48]

Luis Rodriguez controlled the bank account held in the name of Frigorificos which received $261,937 in humanitarian
assistance funds from the State Department in 1986. Rodriguez signed most of the orders to transfer the funds for the Contras
out of that ac-count.[49] Rodriguez was also president of Ocean Hunter, an American seafood company created for him by
Ramon Milian-Rodriguez.[50] Ocean Hunter imported seafood it bought from Frigorificos and used the intercompany
transactions to launder drug money.[51]

In statements before a Florida federal grand jury in connection with a narcotics trafficking prosecution of Luis Rodriguez, Soto
testified that he knew Luis Rodriguez as a narcotics trafficker who had been smuggling drugs into the U.S. since 1979. Soto
also testified that they were partners in the shipment of 35,000 pounds of marijuana to Massachusetts in 1982.[52]

Milian-Rodriguez told Federal authorities about Luis Rodriguez' narcotics trafficking prior to Milian-Rodriguez' arrest in May
1983. In March and April 1984, IRS agents interviewed Luis Rodriguez regarding Ocean Hunter, drug trafficking and money
laundering, and he took the Fifth Amendment in response to every question.[53] In September, 1984, Miami police officials
advised the FBI of information they had received that Ocean Hunter was funding contra activities through "narcotics
transactions," and noting that Luis Rodriguez was its president. This information confirmed previous accounts the FBI had
received concerning the involvement of Ocean Hunter and its officers in Contra supply operations involving the Cuban
American community.[54]

Despite the information possessed by the FBI, Customs and other law enforcement agencies documenting Luis Rodriguez'
involvement in narcotics trafficking and money laundering, the State Department used Frigorificos, which he owned and
operated, to deliver humanitarian assistance funds to the Contras in late 1985. Official funds for the Contras from the United
States began to be deposited into the Frigorificos account in early 1986, and continued until mid-1986.[55]

In May 1986, Senator Kerry advised the Justice Department, Drug Enforcement Agency, State Department, NHAO and CIA
of allegations he had received involving Luis Rodriguez and his companies in drug trafficking and money laundering. In August
1986, the Foreign Relations Committee asked Justice whether the allegations about Luis Rodriguez were true, and requested
documents to determine whether the State Department might have in fact provided funds to a company controlled by drug
traffickers. Justice refused to answer the inquiry.

The indictment of Luis Rodriguez on drug charges 18 months later demonstrated that the concerns raised by Senator Kerry to
the Justice Department and other agencies in May 1986 concerning his companies were well founded, as the State Department
had infact chosen companies operated by drug traffickers to supply the Contras.[56]


DIACSA was an aircraft dealership and parts supply company partly owned by the Guerra family of Costa Rica. DIACSA's
president, Alfredo Caballero, was under DEA investigation for cocaine trafficking and money laundering when the State
Department chose the company to be an NHAO supplier. Caballero was at that time a business associate of Floyd
Carlton--the pilot who flew cocaine for Panama's General Noriega.

In an affidavit filed in federal court in January, 1985, DEA Special Agent Daniel E. Moritz described working as an undercover
money launderer "for the purpose of introducing myself into a criminal organization involved in importing substantial quantities of
cocaine into the United States from South America."[57] That organization was the Carlton/Caballero partnership. According
to Agent Moritz, the cocaine traffickers used DIACSA offices "as a location for planning smuggling ventures, for assembling
and distributing large cash proceeds of narcotics transactions, and for placing telephone calls in furtherance of the smuggling

From March 1985 until January 1986, Moritz received approximately $3.8 million in U.S. currency from members of this
organization "to be distributed, primarily in the form of wire transfers around the world." Most of the $3.8 million was delivered
in DIACSA's offices.

Moritz met both Alfredo Caballero and Floyd Carlton in March of 1985. Moritz had previously learned from a confidential
informant that Carlton was a "major cocaine trafficker from Panama who frequented DIACSA and was a close associate of
Alfredo Caballero." The informant added that "Caballero provided aircraft for Floyd Carlton Caceres' cocaine smuggling
ventures" and that Caballero allowed Carlton and "members of his organization to use DIACSA offices as a location for
planning smuggling ventures, for assembling and distributing large cash proceeds of narcotics transactions and for placing
telephone calls in furtherance of the smuggling ventures." Alfredo Caballero was described by the informant "as the man in
charge of operations for Floyd Carlton Caceres' cocaine transportation organization."[59]

Other members of the group were Miguel Alemany-Soto, who recruited pilots and selected aircraft and landing strips, and
Cecilia Saenz-Barria. The confidential informant said that Saenz was a Panamanian "in charge of supervising the landing and
refueling of the organization's aircraft at airstrips on the Panama/Costa Rica border" and that he "arranges for bribe payments
for certain Costa Rican officials to ensure the protection of these aircraft as they head north loaded with cocaine."[60] During
1984 and 1985, the principal Contra organization, the FDN, chose DIACSA for "intra-account transfers." The laundering of
money through DIACSA concealed the fact that some funds for the Contras were through deposits arranged by Lt. Col. Oliver

The indictments of Carlton, Caballero and five other defendants, including Alfred Caballero's son Luis, were handed down on
January 23, 1985. The indictment charged the defendants with bringing into the United States on or about September 23,
1985, 900 pounds of cocaine. In addition, the indictment charged the defendants with laundering $2.6 million between March
25, 1985 and January 13, 1986.[62]

Despite the indictments, the State Department made payments on May 14, 1986 and September 3, 1986, totaling $41,120.90
to DIACSA to provide services to the Contras.[63]

In addition, the State Department was still doing business with DIACSA on its own behalf six months after the company's
principals had been indicted. Court papers filed in the case in July 1986, show that the U.S. Embassies of Panama and Costa
Rica were clients of DIACSA. While DIACSA and its principals were engaged in plea bargaining negotiations with the Justice
Department regarding the cocaine trafficking and money laundering charges, U.S. Embassy personnel in Panama and Costa
Rica were meeting with one of the defendants to discuss purchasing Cessna planes from the company.[64]

Each of the defendants in the DIACSA case was ultimately convicted on charges of importing cocaine into the United States.
The sentences they received ranged from ten years for one non-cooperating defendant, to nine years for Floyd Carlton, to three
years probation for Luis Caballero and five years probation for his father, DIACSA's owner, Alfredo Caballero, as a
consequence of their cooperation with the government.[65]


When the State Department signed a contract with Vortex to handle Contra supplies, Michael B. Palmer, then the company's
Executive Vice-President signed for Vortex. At the time, Palmer was under active investigation by the FBI in three jurisdictions
in connection with his decade-long activity as a drug smuggler, and a federal grand jury was preparing to indict him in

The contract required Vortex to receive goods for the Contras, store, pack and inventory them. At the time the contract was
signed, Vortex's principal assets were two airplanes which Palmer previously used for drug smuggling.[67]Vortex was selected
by NHAO assistant director Philip Buechler, following calls among Buechler, Palmer, and Pat Foley, the president of Summit


In 1984, the Contra forces under Eden Pastora were in an increasingly hopeless situation. On May 30,1984, Pastora was
wounded by a bomb at his base camp at La Penca, Nicaragua, close to the Costa Rica border. That same day, according to
ARDE officer Karol Prado, aid to ARDE from the United States was cut off.[69]

Despite continued pressure from the United States, Pastora refused to place his ARDE forces under a unified command with
the largest of the Contra organizations--the Honduras-based FDN. The CIA considered Pastora to be "disruptive and
unpredictable."[70] By the time the Boland Amendment cut off legal military aid to the Contras, the CIA had seen to it that
Pastora did not receive any assistance, and his forces were experiencing "desperate conditions."[71]

Although there are discrepancies among the parties as to when the initial meeting took place, Pastora's organization was
approached by George Morales, a Colombian drug trafficker living in Miami who had been indicted on narcotics trafficking

According to the State Department report to the Congress of July 26, 1986:

Information developed by the intelligence community indicates that a senior member of Eden Pastora's Sandino Revolutionary
Front (FRS) agreed in late 1984 with (Morales) that FRS pilots would aid in transporting narcotics in exchange for financial
assistance...the FRS official agreed to use FRS operational facilities in Costa Rica and Nicaragua to facilitate transportation of
narcotics. (Morales) agreed to provide financial support to the FRS, in addition to aircraft and training for FRS pilots. After
undergoing flight training, the FRS pilots were to continue to work for the FRS, but would also fly narcotics shipments from
South America to sites in Costa Rica and Nicaragua for later transport to the United States. Shortly thereafter (Morales)
reportedly provided the FRS one C-47 aircraft and two crated helicopters. He is reported to have paid the sum of $100,000
to the FRS, but there was no information available on who actually received the money.[72]

The State Department said it was aware of only one incident of drug trafficking resulting from this agreement between the
Contras and Morales and that was the case of Contra pilot Gerardo Duran. Duran was arrested in January 1986, in Costa Rica
for his involvement in transporting cocaine to the United States.[73] Duranwas an FRS pilot from 1982 to 1985 and operated
an air taxi service in Costa Rica. According to Marco Aguado and Karol Prado, Duran would fly supplies to the Contras on
the Southern Front and he would charge for each flight.[74]

Robert Owen, courier for Lt. Col. Oliver North, testified to the Iran/Contra Committees that he told North he thought Karol
Prado was involved in trafficking drugs out of Panama, and that Pastora's pilot, Marco Aguado, was also involved.[75] The
Subcommittee was unable to validate Owen's claims. Prado vehemently denied these allegations stating that he believed the
drug trafficking allegations against Pastora were the result of a CIA effort to discredit him.[76]

Morales testified that his involvement with the Contras started in 1984 at the urging of Marta Healey, the widow of one of his
drug pilots, Richard Healey.[77] Marta Healey's first husband was Adolfo "Popo" Chamorro, the second in command to Eden
Pastora in the FRS. She came from a prominent Nicaraguan family.

At the time of his first contract, Morales was under indictment for marijuana smuggling. He testified that he thought by assisting
the Contra cause his indictment would be dropped. Marta Healey introduced Morales to Popo Chamorro, Marco Aguado and
Octaviano Cesar at a meeting in Miami. According to Morales, he wanted to make a deal: He would help the Contras with
their needs, and "they in exchange would help me with my objective, which was solving my indictment." Morales believed the
Contra leaders would help him solve his legal problems because of their contacts with the CIA.[78]

On October 31, 1987 in San Jose, Costa Rica, the Subcommittee videotaped the depositions of three Contra leaders with
intimate knowledge of the Morales relationship with Pastora's organization in video depositions. The three were Karol Prado,
Pastora's head of communications; Marco Aguado, Pastora's air force chief; and Octaviano Cesar who, along with his brother
Alfredo, were political allies of Pastora's at the time. A fourth, Adolfo "Popo" Chamorro, who was Pastora's second in
command in ARDE, testified in closed session of the Subcommittee in April 1988. Chamorro's testimony was taken in closed
session by the consent of the Subcommittee at his request. Dick McCall, of Senator Kerry's personal staff, in an arrangement
worked out with Chamorro and his attorneys, subsequently interviewed him in Miami.

Each denied knowing that Morales was under indictment for drug trafficking when they first met him at Marta Healey's house in
Miami. Popo Chamorro said that as far as he knew Morales was just another rich Miami resident with strong anti-Communist

In addition, all three denied receiving more than $10,000 in cash from Morales. The Subcommittee found that $10,000 was
given to Popo Chamorro to cover the cost of transporting a C-47 owned byMorales, which he donated to ARDE, from Haiti
to Ilopango Air Force Base in El Salvador.[80]

While denying receiving funds personally, Prado, Aguado and Cesar each confirmed elements of Morales' story.

According to Prado, Octaviano Cesar and his brother Adolfo allied themselves politically with Pastora in the Summer of 1984.
A decision was then made to send Popo Chamorro and Octaviano Cesar to the United States to look for funds.[81] In
September, Popo Chamorro returned to Costa Rica with photographs of a DC-4 and a Howard plane, and told Pastora that
they would get six more planes, including a Navajo Panther from George Morales.[82]

Pastora told Chamorro that the C-47 was the most practical plane for the Contras at the time and Popo returned to Miami to
arrange for its transfer. Chamorro provided the Subcommittee with an aircraft purchase order, dated October 1, 1984. The
notarized purchase order provided that for the sum of one dollar, a McDonnell-Douglas DC-3, the civilian designation for a
C-47, would be transferred to Marco Aguado. The order was signed by George Morales, as the seller, and by Marco
Aguado, as the purchaser.

In addition, Chamorro gave the Subcommittee a list of flights made by that C-47 to ferry arms from Ilopango to Costa Rica
and La Penca. Between October 18, 1984 and February 12, 1986, some 156,000 pounds of material were moved from
Ilopango to air fields in Costa Rica. Of the 24 flights during this period, eleven were to La Penca on the Nicaraguan side of the
Rio San Juan.[83]

The Subcommittee substantiated key elements of the Morales story, although it did not find evidence that Cesar, Chamorro, or
Prado were personally involved in drug trafficking. First, all witnesses agreed that Morales gave ARDE a C-47. Evidence of an
association between them is also provided by a Customs document. This document, provided to the Committee by the U.S.
Customs Service, shows that Morales entered the United States from the Bahamas on October 13, 1984, with Marco
Aguado, Octaviano Cesar and Popo Chamorro. They carried $400,000 in cash and checks which were declared by Aguado,
Chamorro and Cesar. They claimed that the checks and money were returned to Morales after clearing Customs.[84]

Aguado summarized the relationship between the Southern Front Contras and the drug traffickers in terms of the exploitation of
the Contra movement by individuals involved in narcotics smuggling. According to Aguado, the trafficking organizations, "took
advantage of the anti-communist sentiment which existed in Central America ... and they undoubtedly used it for drug
trafficking." Referring to the Contra resupply operations, Aguado said the traffickers used "the same connections, the same air
strips, the same people. And maybe they said that it was weapons for Eden Pastora, and it was actually drugs that would later
on go to the U.S.... They fooled people ... Unfortunately, this kind of ac-tivity, which is for the freeing of a people, is quite
similar to the activities of the drug traffickers."[85]

Octaviano Cesar testified that when he dealt with Morales he was:

Thinking in terms of the security of my country. It just didn't enter my mind that I would become involved in such a mess,
because it never entered into my mind to get in that [drug] business ...

I went a couple of times inside in Nicaragua and I saw people there. Young kids 15, 16 years old, they were carrying 30, 40
rounds of ammunition against the Sandinistas ... And that's why I did it. I'm not proud of it, but I just didn't have any choice. I
mean, the U.S. Congress didn't give us any choice. They got these people into a war. The people went inside of Nicaragua, 80
miles inside. They had thousands of supporters, campesinos there helping them ... Now, when those people retreat, those
campesinos were murdered by the Sandinistas. I don't want that, but that's the reality of life.[86]

In addition, Cesar told the Subcommittee that he told a CIA officer about Morales and his offer to help the Contras.

Senator KERRY. Did you have occasion to say to someone in the CIA that you were getting money from him and you were
concerned he was a drug dealer? Did you pass that information on to somebody?

Mr. CESAR. Yes, I passed the information on about the--not the relations--well, it was the relations and the airplanes; yes.
And the CIA people at the American military attache's office that were [sic] based at Ilopango also, and any person or any
plane landed there, they had to go----

Senator KERRY. And they basically said to you that it was all right as long as you don't deal in the powder; is that correct? Is
that a fair quote?

Mr. CESAR. Yes.[87]

After the La Penca bombing of May 30, 1984, all assistance was cut off by the CIA to ARDE, while other Contra groups on
both fronts continued to receive support from the U.S. government through a variety of channels. The United States stated that
the cut-off of ARDE was related to the involvement of its personnel in drug trafficking. Yet many of the same drug traffickers
who had assisted ARDE were also assisting other Contra groups that continued to receive funding. Morales, for example, used
Gerardo Duran as one of his drug pilots, and Duran worked for Alfonso Robello and Fernando "el Negro" Chamorro, who
were associated with other Contra groups, as well as for ARDE.[88]

In a sworn deposition which was taken in San Jose Costa Rica by the Subcommittee on October 31, 1987, Karol Prado,
Pastora's treasurer and procurement officer, vehemently denied allegationsconcerning the personal involvement of ARDE
leadership in drug trafficking. Prado said that because of Pastora's problems with the U.S. government, it was his belief that the
CIA was attempting to discredit the former Sandinista Commandante and his supporters in ARDE with allegations that they
were involved in drug trafficking.[89]

Thomas Castillo, the former CIA station chief in Costa Rica, who was indicted in connection with the Iran/Contra affair,
testified before the Iran/Contra Committees that when the CIA became aware of narcotics trafficking by Pastora's supporters
and lieutenants, those individuals' activities were reported to law enforcement officials.[90] However, Morales continued to
work with the Contras until January 1986. He was indicted for a second time in the Southern District of Florida for a January
1986 cocaine flight to Bahamas and was arrested on June 12, 1986.

Morales testified that he offered to cooperate with the government soon after he was arrested, and that he was willing to take a
lie detector test. He said his attorneys repeated the offer on his behalf several times, but on each occasion the U.S. Attorney,
Leon Kellner, refused.[91]

Leon Kellner and Richard Gregorie, then the head of the criminal division of the Miami U.S. Attorney's office, met with the staff
of the Committee in November 1986. They said that Morales' story was not credible and that Morales was trying to get his
sentence reduced by cooperating with a Senate committee. As Morales had not yet been sentenced, both Kellner and Gregorie
discouraged the staff from meeting with Morales at that time, and the staff respected their request. Kellner and Gregorie said
that Morales was like the many Miami cocaine traffickers who use the "I was working for the CIA" defense.[92]

Following his testimony before the Subcommittee, Morales renewed his offer to work with the government. This time, federal
law enforcement officials decided to accept the offer. Morales provided the government with leads that were used by law
enforcement authorities in connection with matters remaining under investigation. In November 1988, the DEA gave Morales a
lengthy polygraph examination on his testimony before the Subcommittee and he was considered truthful.[93]


John Hull was a central figure in Contra operations on the Southern Front when they were managed by Oliver North, from
1984 through late 1986.[94] Before that, according to former CostaRican CIA station chief Thomas Castillo's public
testimony, Hull had helped the CIA with military supply and other operations on behalf of the Contras.[95] In addition, during
the same period, Hull received $10,000 a month from Adolfo Calero of the FDN--at North's direction.[96]

Hull is an Indiana farmer who lives in northern Costa Rica. He came to Costa Rica in mid-1970's and persuaded a number of
North Americans to invest in ranch land in the northern part of the country.[97] Using their money and adding some of his own,
he purchased thousands of acres of Costa Rican farm land. Properties under his ownership, management or control ultimately
included at least six airstrips. To the many pilots and revolutionaries who passed through the region, this collection of properties
and airstrips became known as John Hull's ranch.

On March 23, 1984, seven men aboard a U.S. government owned DC-3 were killed when the cargo plane crashed near Hull's
ranch, revealing publicly that Hull was allowing his property to be used for airdrops of supplies to the Contras.[98] But even
before this public revelation of Hull's role in supporting the Contras, officials in a variety of Latin American countries were
aware of Hull's activities as a liaison between the Contras and the United States government. Jose Blandon testified, for
example, that former Costa Rican Vice President Daniel Oduber suggested he (Blandon) meet with Hull in 1983, to discuss the
formation of a unified southern Contra command under Eden Pastora.[99]

Five witnesses testified that Hull was involved in cocaine trafficking: Floyd Carlton, Werner Lotz, Jose Blandon, George
Morales, and Gary Betzner. Betzner was the only witness who testified that he was actually present to witness cocaine being
loaded onto planes headed for the United States in Hull's presence.

Lotz said that drugs were flown into Hull's ranch, but that he did not personally witness the flights. He said he heard about the
drug flights from the Colombian and Panamanian pilots who allegedly flew drugs to Hull's airstrips. Lotz described the strips as
"a stop for refuel basically. The aircraft would land, there would be fuel waiting for them, and then would depart. They would
come in with weapons and drugs." Lotz said that Hull was paid for allowing his airstrips to be used as a refueling stop.[100]

Two witnesses, Blandon and Carlton recounted an incident involving the disappearance of a shipment of 538 kilos of cocaine
owned by the Pereira or Cali cocaine cartel. Teofilo Watson, a member of Carlton's smuggling operation, was flying the plane
to Costa Rica for the Cartel. The plane crashed and Watson was killed. The witnesses believed that the crash occurred at
Hull's ranch and that Hull took the shipment and bulldozed the plane, a Cessna 310, into the river.Carlton testified that the
Colombians were furious when they discovered the cocaine missing. He said they sent gunmen after Hull and in fact kidnapped
a member of Hull's family to force the return of the cocaine. When that failed they became convinced that Carlton himself stole
the cocaine and they sent gunmen after him. The gunmen dug up Carlton's property in Panama with a backhoe looking for the
lost cocaine, and Carlton fled for his life to Miami.[101]

Gary Betzner started flying for Morales' drug smuggling network in 1981. Betzner testified that his first delivery of arms to the
Contras was in 1983, when he flew a DC-3 carrying grenades and mines to Ilopango Air Force Base in El Salvador. His
co-pilot on the trip was Richard Healey, who had flown drugs for Morales.[102]

Betzner said the weapons were unloaded at Ilopango by Salvadoran military personnel and an American whom he assumed
worked for the U.S. Department of Defense. Betzner testified that he and Healey flew the plane on to Colombia where they
picked up a load of marijuana and returned to their base at Great Harbor Cay in the Bahamas.[103]

According to Betzner, the next Contra weapons and drugs flight took place in July 1984. Morales asked him to fly a load of
weapons to Hull's ranch and to pick up a load of drugs. Betzner flew a Cessna 402-B to John Hull's ranch. According to
Betzner, he was met at the airstrip by Hull and they watched the cargo of weapons being unloaded, and cocaine, packed in 17
duffel bags, and five or six two-foot square boxes being loaded into the now-empty Cessna. Betzner then flew the plane to a
field at Lakeland, Florida.[104]

Yet another guns for drugs flight was made two weeks later. On this trip, Betzner said he flew a Panther to an airstrip called
"Los Llanos," about ten miles from Hull's properties and not far from the Voice of America transmitter in northern Costa Rica.
Betzner testified that Hull met him again and the two watched while the weapons were unloaded and approximately 500 kilos
of cocaine in 17 duffel bags were loaded for the return flight to Florida.[105]

Hull became the subject of an investigation by the U.S. Attorney for the Southern District of Florida in the spring of 1985. In
late March 1985, Assistant U.S. Attorney Jeffrey Feldman and two FBI agents went to Costa Rica to investigate Neutrality
Act violations by participants in the Contra resupply network that were also under investigation at the time by Senator Kerry.
Both the Feldman and Kerry inquiries had been prompted in part by statements made to reporters by soldiers of fortune
imprisoned in Costa Rica who alleged John Hull was providing support for the Contras with the help of the National Security

Feldman and the FBI agents met with U.S. Ambassador to Costa Rica, Lewis Tambs, and the CIA Chief of Station, Thomas
Castillo,who told him John Hull knew Rob Owen and Oliver North and gave the impression that Hull had been working for
U.S. interests prior to March of 1984. In addition, one of the embassy security officers, Jim Nagel, told one of the FBI agents
accompanying Feldman, that regarding Feldman's inquiries, "... these were agencies with other operational requirements and we
shouldn't interfere with the work of these agencies."[107] When Feldman attempted to interview Hull, Feldman learned that
Hull was told by the embassy staff not to talk to him without an attorney present.[108]

Feldman concluded that U.S. Embassy officials in Costa Rica were taking active measures to protect Hull. After Feldman
interviewed two of the mercenaries, Peter Glibbery and Steven Carr, regarding their allegations of Hull's involvement in criminal
activity, Feldman learned that Kirk Kotula, Consul in San Jose, was "trying to get Carr and the rest of these people to recant
their statements regarding Hull's involvement with the CIA and with any other American agency.[109] Feldman added "... it
was apparent we were stirring up some problem with our inquiries concerning John Hull."[110] Feldman concluded that
because Hull was receiving protection from some US officials, that it would not be possible to interview him. Feldman therefore
took no further steps to do so.[111]

In an effort to stop the investigation against him and to cause the Justice Department to instead investigate those urging an
investigation of Hull, Hull prepared falsified affidavits from jailed mercenaries in Costa Rica to U.S. Attorney Kellner. In the
affidavits the mercenaries accused Congressional staff of paying witnesses to invent stories about illegal activities associated
with the clandestine Contras supply network. The Justice Department ultimately concluded that the affidavits had been forged.
Kellner testified that he "had concerns about them and ... didn't believe them.[112]

To this day, the Justice Department has taken no action against John Hull for obstruction of justice or any related charge in
connection with his filing false affidavits with the U.S. Justice Department regarding the Congressional investigations.

In the period in which he was providing support to the Contras, Hull obtained a loan from the Overseas Private Investment
Corporation for $375,000 which ultimately proved to have been obtained with false documentation.

In 1983, Hull and two associates, Mr. William Crone and Mr. Alvaro Arroyo approached OPIC for a loan to finance a joint
venture wood products factory that would make wheelbarrow and ax handles for the U.S. market. In fact, according to
testimony from Crone and OPIC officials, no contributions from Hull, Arroyo or himself were made to the joint venture. On the
basis of the applica-tion, some supporting documentation and a site visit, on March 30 1984, OPIC advanced $375,000.[113]

By the end of 1985, after one interest payment, the loan lapsed into default, and OPIC officials began to recognize that the
project was a fraud, and that Hull had made false representations in making the application to OPIC.[114] OPIC officials
found that the money which was disbursed by their Agency was deposited in Hull's Indiana bank account and the funds were
withdrawn by Hull in cash. When OPIC inquired in 1986 as where the funds were going, Hull told OPIC officials that he would
be using the cash to buy Costa Rican money on the black market to get a more favorable exchange rate.[115]

In fact, Costa Rica has a favorable exchange rate for foreign investment and the excuse Hull offered does not make sense.
What appears to have happened is that Hull simply took the money, inasmuch as no equipment was purchased for the factory,
no products were shipped from it, and Hull's partner, Crone, testified that he never saw the money. Indeed, prospective
purchasers complained that they paid Hull for products in advance but never received delivery.[116]

On the basis of the subsequent OPIC investigation of the loan to Hull's company, in April 1987, the case was referred to the
Justice Department for a criminal fraud investigation.[117] While nothing has yet happened for almost two years, the Justice
Department maintains the investigation is still ongoing.[118]

OPIC foreclosed on the properties which Hull had put up as collateral for the loan. Following the foreclosure to recover their
monies, OPIC sold the property at auction. However, in order to prevent a sale far below the market price, OPIC bid at the
auction and wound up purchasing its own property for $187,500.

OPIC then attempted to sell the property directly. An advertisement was placed in The Wall Street Journal which attracted a
single offer from an investment banker in Philadelphia. An agreement was negotiated whereby the company purchasing the
property from OPIC was required to make no down payment, and only to repay OPIC its $187,500 from the future proceeds
of the sale of timber cut on the land. The corporation which purchased the property has no other assets other than the land. If
the agreement is fulfilled by the purchasers of the land, OPIC will realize repayment of $187,500, half of the original $375,000
loaned to Hull.[119]

The Subcommittee also heard testimony investors who had allowed Hull to purchase property for them and then to manage the
property, who testified that he did not deliver on his promises, he failed to purchase the properties he said he would, and in one
case,took farm equipment off a farm he was paid to manage and converted it for his own use.[120]

In mid-January 1989, Hull was arrested by Costa Rican law enforcement authorities and charged with drug trafficking and
violating Costa Rica's neutrality.


The San Francisco Frogman case was one of the first cases in which allegations linking specific Contra organizations to drug
smugglers surfaced. In a July 26, 1986 report to the Congress on Contra-related narcotics allegations, the State Department
described the Frogman case as follows:

"This case gets it nickname from swimmers who brought cocaine ashore on the West Coast from a Colombian vessel in
1982-1983. It focused on a major Colombian cocaine smuggler, Alvaro Carvajal-Minota, who supplied a number of West
Coast smugglers. It was alleged, but never confirmed, that Nicaraguan citizen Horacio Pereira, an associate of Carvajal, had
helped the Nicaraguan resistance. Pereira was subsequently convicted on drug charges in Costa Rica and sentenced to twelve
years imprisonment. Two other Nicaraguans, Carlos Cabezas and Julio Zavala, who were among the jailed West Coast
traffickers convicted of receiving drugs from Carvajal, claimed long after their conviction that they had delivered large sums of
money to resistance groups in Costa Rica and that Pereira, who was not charged in the case, has said the profits from the drug
sale would finance resistance activities."[121]

The allegations made by Cabezas and Zavala involved two Southern Front Contra groups--UDN-FARN, a military group
associated with Fernando "El Negro" Chamorro, and PCNE, a Contra political group in the South. Cabezas claimed that he
helped move 25 to 30 kilos of cocaine from Costa Rica to San Francisco, generating $1.5 million. According to Cabezas, part
of that money was given to Troilo and Fernando Sanchez to help Eden Pastora's and Fernando "El Negro" Chamorro's
operations on the Southern Front in 1982 and l983.[122]

After the trial, the U.S. government returned $36,020 seized as drug money to one of the defendants, Zavala, after he
submitted letters from Contra leaders claiming the funds were really their property. The money that was returned had been
seized by the FBI after being found in cash in a drawer at Zavala's home with drug transaction letters, an M-1 carbine, a
grenade, and a quantity of Cocaine.[123]

The Subcommittee found that the Frogman arrest involved cocaine from a Colombian source, Carvajal-Minota. In addition,
Zavala and Cabezas had as a second source of supply, Nicaraguans living in Costa Rica associated with the Contras. FBI
documents from the Frogman case identify the Nicaraguans as Horacio Pereira, Troilo Sanchez and Fernando
Sanchez.[124]Pereira was convicted on cocaine charges in Costa Rica in 1985 and sentenced to 12 years in prison.[125] An
important member of the Pereira organization was Sebastian "Huachan" Gonzalez, who also was associated with ARDE in
Southern Front Contra operations. Robert Owen advised North in February 1985, that Gonzalez was trafficking in
cocaine.[126] Jose Blandon testified that Eden Pastora knew that Gonzalez was involved in drug trafficking while he was
working with ARDE. Gonzalez later left the Contra movement and fled from Costa Rica to Panama, where he went to work for
General Noriega.[127]

During the Pereira trial, evidence was also presented by the Costa Rica prosecutor showing that drug traffickers had asked
leader Ermundo Chamorro the brother of UDN-FARN leader Fernando "El Negro" Chamorro, for assistance with vehicles to
transport cocaine and for help with a Costa Rica police official.[128]

Troilo and Fernando Sanchez were marginal participants in the Contra movement and relatives of a member of the FDN


Several groups of Miami-based Cuba Americans provided direct and indirect support for the Southern Front during the period
that the Boland Amendment prohibited official U.S. government assistance. Their help, which included supplies and training,
was funded in part with drug money.[130] The State Department described the allegations in its July 1986 report to Congress
as follows:

There have been allegations that Rene Corbo and other Cuban Americans involved in anti-Sandinista activities in Costa Rica
were connected with Miami-based drug traffickers. Corbo reportedly recruited a group of Cuban American and Cuban exile
combatants and military trainers in the Miami area who operated inside Nicaragua and in the northern part of Costa Rica. Two
Cuban exiles in this group, Mario Rejas Lavas and Ubaldo Hernandez Perez, were captured by the Sandinistas in June 1986.
They were reportedly members of the UNO/FARN group headed by Fernando "El Negro" Chamorro. There is no information
to substantiate allegations that this group from Miami has been a source of drug money for the UNO/FARN or any other
resistance organization.[131]On May 6, 1986, Committee staff met with representatives of the Justice Department, FBI, DEA,
CIA and State Department, to advise them of allegations of gun running and drug trafficking in connection with this group.

In August 1986, the Committee requested information from the Justice Department regarding the allegations concerning Corbo
and fellow Cuban Americans Felipe Vidal, Frank Castro, and Luis Rodriguez and Frank Chanes (two of the principals in
Frigorificos de Puntarenas and Ocean Hunter), concerning their involvement in narcotics trafficking. The Justice Department
refused to provide any information in response to this request, on the grounds that the information requested remained under
active investigation, and that the Committee's "rambling through open investigations gravely risks compromising those

Less than three months earlier, the Justice Department had advised both the press and the Committee that the allegations had
been thoroughly investigated and were without foundation. [133]

At no time did the Justice Department disclose to the Committee in response to its inquiry that extensive information had in fact
been developed by the FBI from 1983 through 1986 suggesting that many of the allegations the Committee was investigating
were true.

At the May 6, 1986 meeting with Committee staff, the CIA categorically denied that weapons had been shipped to the Contras
from the United States on the flights involving Rene Corbo, noting that the material on which they were basing these assertions
was classified, and suggested that the allegations that had been made to the contrary were the result of disinformation.[134]

In fact, as the FBI had previously learned from informants, Cuban American supporters of the Contras had shipped weapons
from south Florida to Ilopango, and from there to John Hull's airstrips in Costa Rica.[135] The persons involved admitted to
the FBI that they had participated in such shipments, making general statements about them beginning in 1985. On June 4,
1986 and June 16, 1986, Rene Corbo, one of the principals in the shipments, explicitly told the FBI that he had participated in
shipping weapons to the Contras in violation of U.S. Neutrality laws.[136]

The Cuban-American contingent supporting the Contra effort on the Southern Front work with Pastora until May 30,1984
bombing at La Penca. After the assassination attempt on Pastora they shifted their allegiance to Fernando "El Negro"
Chamorro of UDN-FARN. By mid-June 1984, the drug smuggling through the Southern Front zones controlled by the Contras
had grown sufficientlyobvious that Robert Owen warned Lt. Col. Oliver North at the NSC that the "Cubans (are) involved in

Notes taken by Colonel Robert L. Earl during his tenure at the NSC described how in August 1986, the CIA was worried

... disreputable characters in the Cuban-American community that are sympathetic to the Contra cause but causing more
problems than help and that one had to be careful in how one dealt with the Cuban-American community and its relation to this,
that although their motives were in the right place there was a lot of corruption and greed and drugs and it was a real

In August 1988, Corbo and Castro were indicted in a Neutrality Act case involving the Contras brought by the U.S. Attorney
for Miami and prosecuted by Assistant U.S. Attorney Jeffrey Feldman. No narcotics-related allegations were included in the
August 1988 indictment.[139]

One of the three principals in Frigorificos de Puntarenas and Ocean Hunter, Luis Rodriguez, was indicted on drug charges in
April 1988. The others, Frank Chanes and Moises Nunez, participated in Contra military assistance operations in 1984 and
1985.[140] Nunez was employed by both the drug money laundering front, Frigorificos de Puntarenas, and by Glenn Robinette
on behalf of the Second-North Enterprise. Former CIA Costa Rica Chief of Station Thomas Castillo told the Iran-Contra
committees that Nunez "was involved in a very sensitive operation" for the Enterprise.[141]


A particularly controversial allegation arose during the course of the Subcommittee's investigation. This involved Ramon Milian
Rodriguez's offer to assist the Contras, following his arrest for money laundering.

In a June 26, 1987 closed session of the Subcommittee, Milian Rodriguez testified that in a meeting arranged by Miami private
detective Raoul Diaz with Felix Rodriguez, he (Milian) offered to provide drug money to the Contras. Milian Rodriguez stated
that Felix accepted the offer and $10 million in such assistance was subsequently provided the Contras through a system of
secret couriers.

Milian Rodriguez testified that he also offered to assist in entrapping the Sandinistas in a drug sting--all in return for dropping the
charges then pending against him.

Felix Rodriguez strenuously denied Milian Rodriguez's version of the meeting, stating that he reported Milian's offer to a number
of U.S. government agencies, including the FBI and CIA. No action was taken by those agencies, and Milian Rodriguez's case
went to trial.

Raoul Diaz refused to respond to a Committee subpoena to discuss his recollection of the meeting. Therefore, because of the
diffi-culty the Subcommittee faced in ascertaining who was telling the truth--Ramon Milian Rodriguez or Felix
Rodriguez--Milian was asked whether he would be willing to take a polygraph examination. He agreed to submit to an
examination on the question of providing drug money to the Contras through Felix Rodriguez.

Senator Kerry, the Subcommittee Chairman, arranged for one of the country's leading polygraph experts, Dr. Donald Raskin of
the University of Utah, to travel to Washington, D.C. to administer the test. Dr. Raskin administered a partial examination of
Milian Rodriguez on June 3-4, 1988. On two critical questions, Ramon Milian Rodriguez's answers were determined to be
deceptive by Dr. Raskin. The questions were as follows:

1. Did Felix Rodriguez ask you to arrange deliveries of money for the Contras during the meeting at Raoul's office?

Answer, yes.

2. Did you arrange approximately five deliveries of money for the Contras on the basis of phone calls you personally received
from Felix Rodriguez?

Answer, yes.

On the third question, Dr. Raskin could not determine whether or not Ramon Milian Rodriguez was being truthful in his
response. The question was as follows:

3. Did you arrange the deliveries of at least $5 million for the Contras using the procedures that you and Felix worked out?

Answer, yes.

At that point, Milian Rodriguez stated that he did not want to continue the examination. Based upon Dr. Raskin's oral evaluation
of Ramon Milian Rodriguez, the Chairman concluded that his version of the meeting with Felix Rodriguez and his subsequent
relationship with Felix in providing drug money for the Contras was not truthful. The Chairman reached no conclusion regarding
the issue of whether Ramon Milian arranged for the deliveries of at least $5 million for the Contras.

During Felix Rodriguez' public testimony before the Subcommittee on July 14, 1988, Senator Kerry stated that he did not
believe Ramon Milian Rodriguez' version of the meeting was truthful.

However, Milian Rodriguez' testimony regarding the Cartels, General Noriega's role in narco-trafficking, and his involvement in
setting up companies which were later used to support the Contras, was corroborated by a number of witnesses, including Jose
Blandon, Floyd Carlton, Gerald Loeb, and a Miami attorney who had supplied information on the Cartels in a closed session
deposition. In addition, Milian Rodriguez' testimony on many of these points was corroborated by extensive documentary
evidence and by grand jury statements by his partners in federal criminal proceedings.


[1 ]Subcommittee deposition of Marcos Aguado, Part 3, p. 285.

[2] "Allegations of Misconduct by the Nicaraguan Democratic Resistance," State Department document #3079c, April 16,

[3] State Department document 3079c

[4] Allegations of Drug trafficking and the Nicaraguan Democratic Resistance, State Department document #5136c, July

[5] Iran-Contra testimony of Central American Task Force Chief, August 5, 1987, 100-11, pp. 182-183.

[6] Iran-Contra deposition of Central American Task Force Chief, Appendix B, Vol. 3 pp. 1121 - 1230. Also North Diary
page Q1704, March 26,1984, "Pastora revealed as drug dealer."

[7] See extensive FBI investigative materials released in discovery in U.S. v. Corbo and U.S. v. Calero, SD Florida, 1988,
documenting information the FBI had collected regarding these matters from 1984-1986.

[8] National Public Radio, All Things Considered, May 5, 1986, Bill Buzenberg; New York Times, May 6, 1986, p. A-6.

[9] Memcoms of May 6,1986 meeting, Subcommittee files.

[10] Winer MemCom, 5/6/86, Messick MemCom, 5/6/86; Marum Memcom; 5/6/86, Committee Files; see Iran/Contra
Deposition of FBI Agent Kevin Currier, Appendix B, Vol. 8 pp. 205-206.

[11] Foreign Relations Committee-Justice Department correspondence, August 10,1985.

[12] Subcommittee testimony of Jeffrey B. Feldman, October 5, 1988, p. 24; Feldman MemCom, November 17, 1987.

[13] Subcommittee testimony of General Paul Gorman, Part 2, February 8, 1988 p. 44.

[14] Subcommittee testimony of David Westrate, Part 4, July 12, 1988, p. 144.

[15] Interviews conducted by Senator John F. Kerry with current and former Costa Rican law enforcement officials, San Jose,
Costa Rica, October 31,1987.

[16] Subcommittee testimony of Jose Blandon, Part 2, February 9, 1988 pp. 138-139.

[17] Kerry interviews in Costa Rica, op. cit.

[18] Subcommittee closed session with Werner Lotz, Part 4, April 8, 1988, p. 673; Blandon testimony, Part 2, p. 86; see also
Carlton, Part 2, p. 196.

[19] Lotz testimony, Part 4, p. 674 and Subcommittee testimony of Frances J. McNeil, Part 3 April 4, 1988, p. 58.

[20] Blandon testimony, Part 2, p. 86 and McNeil, Part 3, p. 55, and Subcommittee testimony of Floyd Carlton, Part 2,
February 10, p. 196.

[21] Kerry interviews in Costa Rica, ibid.

[22] Lotz testimony, op. cit., p. 690.

[23] Lotz, Part 4, p. 690.

[24] Lotz, Part 4, p. 678.

[25] DEA Testimony before House Subcommittee on Crime, July 28,1988.

[26] Ibid, pp. 683-684.

[27] Ibid, pp. 680, 682.

[28] Kerry interviews in Costa Rica, ibid.

[29] Castillo deposition, ibid., p. 483.

[30] Lotz, Part 4, p. 681- Letter of Eden Pastora to David Sullivan and Assistant Secretary of State Elliot Abrams, April 10,

[31] Subcommittee testimony of Gary Betzner, Part 3, April 7, 1988, pp. 262-265.

[32] Robert W. Owen, Iran-Contra testimony, May 14, 1987, p. 7; see also memo from Owen to Oliver North, April 1,
1985, pp. 1, 3.

[33] Subcommittee interviews with GAO analysts, September 28,1988.

[34] Subcommittee interviews with GAO analysts, ibid.- interviews with Ambassador Duemling, April 6, 1988.

[35] Source for Payments to Suppliers: GAO Analysis of NHAO Accounts, final figures provided by Department of State to
the Subcommittee on Narcotics, Terrorism and International Operations. January 4,1989.

[36] Duemling statement to Senator Kerry, April 6, 1988.

[37] Iran-Contra deposition of Robert Duemling, Appendix B, Volume 9, pp 47-78.

[38] See Iran-Contra testimony of Adolfo Calero, Appendix B, Volume 3, p. 176.

[39] U.S. Customs Service investigative report, "Guy Penilton Owen, et al., N90201," file NOGGBDO30036, New Orleans,
May 18, 1983, pp. 6-8.

[40] Subcommittee interview with Sheriff of Port Charlotte County, Florida, May 1987.

[41] See Commerce Department Shipper's Export Declaration for R/M Equipment, Inc., file 0003688, Miami, Florida,
February 28, 1985, re shipments for"Armed Forces of Honduras."

[42] Commerce Department's Shipper's Export Declaration for R/M Equipment, Inc., file # 0003688, Miami, Florida,
February 28,1985.

[43] Customs report, NOGGGGGBDO300036, ibid., p. 13

[44] Address book seized by Customs, Port Charlotte, Florida, N2551, March 16,1987.

[45] Subcommittee staff interview with Sheriffs investigators, Port Charlotte County, Florida, May, 1987.

[46] Grand jury statements of Carlos Soto on file in U.S. v. Rodriguez, 99-0222, USDC, Northern District of Florida,
September 29, 1987, and Subcommittee testimony of Ramon Milian-Rodriguez, Part 2, February 11, 1988, pp. 260-261;
documents seized in U.S. v. Milian Rodriguez, SD Florida 1983.

[47] Ibid.

[48] U.S. v. Luis Rodriguez, 87-01044, US District Court for the Northern District of Florida; U.S. v. Luis Rodriguez,
88-0222 CR-King, U.S. District Court for the Southern District of Florida.

[49] Banking records of Frigorificos de Puntarenas subpoenaed by House Foreign Affairs Subcommittee on the Western
Hemisphere, May 1986; GAO Analysis NHAO Expenditures, May 1986.

[50] Corporate Records, Florida Secretary of State, ocean Hunter, Inc.

[51] Grand jury statements of Soto, ibid., Ramon Milian-Rodriguez, ibid.

[52] Documents on file in U.S. v. Rodriguez, 99-0222, USDC, Northern District of Florida, 1988, from grand jury statements
of Carlos Soto.

[53] Documents on file in U.S. u. Luis Rodriguez, ibid., Northern District of Florida.

[54] FBI 302, Continental Bank Bombing, FBI Agent George Kiszynski, MM174A-1298, released in U.S. v. Corbo,
Southern District of Florida, 1988.

[55] GAO Analysis of NHAO Payments, Western Hemisphere Subcommittee of House Foreign Affairs Committee, May
1986; banking records subpoenaed by Western Hemisphere Subcommittee.

[56] U.S. V. Luis Rodriguez, ibid., Northern District of Florida; GAO analysis of NHAO payments.

[57] Affidavit of Daniel E. Moritz, Special Agent for the DEA January 1985, U.S. v. Carleton et al., SD Florida, 85-70.

[58] Ibid.

[59] Moritz Affidavit, pp. 3-4, ibid.

[60] Ibid.

[61] See Iran-Contra testimony of Adolfo Calero, Appendix B Volume 3, p. 176

[62] U.S. v. Carlton, et al., U.S. District Court, Southern District of Florida, January 23, 1986.

[63] GAO Analysis, NHAO Accounts, provided to Subcommittee September, 1988

[64] Motion For Permission to Travel, U.S. v. Caballero, SD Florida, 86-70-CR, July 16, 1986.

[65] Court record, U.S. v. Carlton-Caceres, et al. SD Florida 86-070.

[66] Indictment, U.S. v. Palmer, Detroit U.S. Attorney's Office, 1986; Subcommittee testimony of Michael B. Palmer, Part 3,
April 6,1988, pp. 208-213.

[67] Palmer, Part 2, p. 205 and Palmer Subcommittee Deposition, April 5, 1988, pp. 75-79, see generally Palmer indictment
by Detroit U.S. Attorney in June 1986, and documents released as discovery in U.S. v. Vogel et al.

[68] Palmer testimony, House Judiciary Subcommittee on Crime, September 23,1988.

[69] Subcommittee deposition of Karol Prado, Part 3, p. 278, see also Iran/Contra Testimony of CIA Central American Task
Force Chief, August 5, 1987,100-11, pp. 192-183.

[70] Castillo executive session, Iran/Contra Committees, ibid., pp. 9-10.

[71] Subcommittee deposition of Octaviano Cesar, San Jose, Costa Rica, October 31, 1987, Part 3, pp.278-281.

[72] State Department document #5136c, p. 5.

[73] Ibid.

[74] Subcommittee testimony of Marco Aguado and Karol Prado, Part 3, p. 285.

[75] Iran-Contra testimony of Robert Owen, Appendix B, Volume 20, pp. 849-850.

[76] Deposition of Karol Prado, ibid., p. 285.

[77] Subcommittee testimony of George Morales, Part 3, April 7, 1988, p. 297.

[78] Ibid., p. 300.

[79] Closed session testimony of Adolfo "Popo" Chamorro, April 6, 1988, p. 13.

[80] Ibid., p. 15.

[81] Testimony of Karol Prado, Part 3, p. 278.

[82] Ibid., pp. 278-279

[83] Chamorro, ibid., pp. 11-12.

[84] Depositions of Aguado, Prado and Cesar, Part 3, pp. 277-286 and Chamorro, ibid., pp. 16, 20.

[85] Aguado, Part 3, p. 285

[86] Cesar, Part 3, p. 286.

[87] Ibid., p. 282.

[88] See e.g. Letter from Eden Pastora to David Sullivan and Elliott Abrams, Ibid.

[89] Subcommittee testimony of Karol Prado, Part 3, p. 385. See North Diary p. Q0450, July 24, 1984. The entry reads: "get
Alfredo Cesar on Drugs," see also Iran-Contra declassified executive session testimony of Thomas Castillo, May 29, 1987, pp.
83-85 and Iran-Contra deposition of Thomas Castillo, Appendix B Volume E, pp. 250-252.

[90] Iran-Contra declassified executive session of Thomas Castillo, p. 84.

[91] Subcommittee testimony of George Morales, Part 1, July 16, 1987, p. 98.

[92] David Keany and Andy Semmel of the Senate Foreign Relations Committee staff and Dick McCall of Senator Kerry's
staff, attended the meeting.

[93] See correspondence from DEA Administrator to John C. Lawn to Senator John F. Kerry, January 13, 1989.

[94] North notebook pages Q 0344, 0414, 0415, 0426, 0431, 0543, 0550, 0932, 0955, 0977, 1156 1159; Iran-Contra
Deposition of Robert W. Owen, May 4, 1987, pp. 6-15 and October 1, 1987, pp. 3-34; RWO Exhibit 12, 2/27/86;
Iran-Contra testimony, May 14,1987, p. 818.

[95] Castillo executive session, ibid., p. 59.

[96] Iran-Contra deposition of Robert W. Owen, Appendix B, Vol. 20, pp. 650, 802

[97] Testimony of Louell Hood and Douglas Siple, Subcommittee on International Economic Policy, Trade, Oceans and
Environment and Subcommittee on Terrorism, Narcotics and International Operations, October 30, 1987, pp. 160-161.

[98] "The CIA Blows an Asset," Newsweek, September 3, 1984, pp. 48-49.

[99] Subcommittee testimony of Jose Blandon, Part 2, p. 129.

[100] Subcommittee deposition of Werner Lotz, Part 4, April 8, 1988, pp. 681-682, 691-696.

[101] Subcommittee testimony of Floyd Carlton, Part 2, pp. 205-507; Subcommittee testimony of Jose Blandon, Part 2, pp.

[102] Betzner, Part 3, pp. 253-254, 256.

[103] Ibid., pp. 257-258

[104] Ibid., pp. 262-267; see also Morales testimony, Part 3, pp. 301-304 and DEA polygraph of Morales.

[105] Ibid., pp. 262-267.

[106] Iran-Contra deposition of Jeffrey Feldman, Appendix B, Volume 10, April 30, 1987, pp. 77-78; Statements of Steven
Carr and Peter Glibbery to Senate staff, March 8,1986.

[107] Feldman, ibid., pp.

[108] Ibid. p. 86.

[109] Ibid. pp. 86-88.

[110] Ibid., p. 84.

[111] Ibid., pp. 86-88.

[112] Iran-Contra testimony of Leon Kellner, Appendix B, Vol. 10, April 30, 1987, pp. 1094-1095.

[113] Testimony of Eric Garfinkel, Vice President and General Counsel, Overseas Private Investment Corporation,
Subcommittee on International Economic Policy Trade, Oceans and Environment and Subcommittee on Terrorism, Narcotics
and International Operations, Part 1, October 30, 1987 pp. 106-107.

[114] Ibid., p. 107.

[115] Ibid., p. 127.

[116] Subcommittee interviews with prospective purchasers.

[117] OPIC testimony, ibid., p. 107.

[118] Subcommittee interviews with OPIC and Justice staff, January 1989.

[119] OPIC documents provided the Subcommittee.

[120] Subcommittee testimony of Crone, Sipple and Hood, ibid., pp. 147-167.

[121] State Department Document #5136c, July 26, 1986

[122] San Francisco Examiner, March 16, 1986.

[123] Ibid.

[124] November 8, 1982, FBI teletype from San Francisco to Director, U.S. v. Zavala, et al.

[125] CBS Evening News, June 2, 1986.

[126] Iran/Contra Testimony of Robert Owen, May 14, 1987, Exhibit RWO 7, p. 801.

[127] Blandon, Part 2, pp. 132-133.

[128] CBS Evening News, June 12, 1986.

[129] Staff interview with Carlos Cabezas, March, 1988, and with former Contras in San Francisco and Miami.

[130] FBI 302's of Special Agent George Kiszynski, released in U.S. v. Calero and U.S. v. Corbo , both Southern District of
Florida, including 3/8/85 interview of Frank Castro, 12/17/84 interview of Raphael Torres Jimenez, 3/1/85 interview of Rene
Corbo; 9/6/84 interview of Jose Coutin; see also grand jury testimony of Carlos Soto in U.S. v. Luis Rodriquez, Northern
District of Florida.

[131] State Department Document #5136c, July 26, 1986.

[132] Letter of John Bolton to Senator Richard G. Lugar and Senator Claiborne Pell, August 11, 1986.

[133] Statements of DOJ spokesman Pat Korten to National Public Radio, May 5, 1986; New York Times, May 6, 1986;
statements of Korten, Kenneth Vergquist, and other Justice Department officials to Committee staff prior to June 26, 1986
Executive Session; see generally Kellner Deposition to Subcommittee, November 8, 1988, noting his objections to statements
by Justice regarding the case.

[134] Winer Memcom, May 6, 1986 meeting, Subcommittee files.

[135] See generally the investigative files of Special Agent Kisyznski released in U.S. v. Corbo and U.S. v. Calero; SD
Florida 1988; admissions of Ramon Milian Rodriguez to Customs in May 1983, U.S. v. Milian Rodriguez, SD Florida,
documents released in connection with U.S. v. Luis Rodriguez, ibid.

[136] FBI 302's of SA Kisyznski, released in U.S. v. Corbo, SD Florida, 1988.

[137] North Notebook Entry Q-0344.

[138] Iran/Contra Deposition of Robert L. Earl. Appendix B, Vol. 9, p. 1109.

[139] U.S. v. Calero et al. and U.S. v. Corbo et al., ibid.

[140] U.S. v. Luis Rodriguez, Northern District of Florida; FBI 302's of SA Kiszynski, ibid.

[141] Iran-Contra Testimony of Owen, Appendix B, Vol. 20, pp. 733-735; deposition of Thomas Castillo, Appendix B, vol 3,
p. 180.



"Honduran DC-6 which
is being used for
runs out of New Orleans
is probably being used
for drug runs into U.S."
-LtCol Oliver North 09Aug85




Psychological Operations in Guerilla Warfare

One of the CIA's illegal training manuals for the contras. It advises the "Armed Propaganda Teams" on ways to justify the
assassination of civilians, use blackmail and professional criminals to destabilize a country.

Psychological Operations in Guerilla Warfare

by "Tacayán"


   2.Combatant-Propagandist Guerrillas
   3.Armed Propaganda
   4.Armed Propaganda Teams
   5.Development and Control of the "Front" Organizations
   6.Control of Meetings and Mass Assemblies
   7.Support of Contacts with Their Roots in Reality


   2.Political Awareness
   3.Group Dynamics
   4.Camp Procedures
   5.Interaction with the People


   2.Close Identification with the People
   3.Implicit and Explicit Terror
   4.Guerrilla Weapons Are the Strength of the People over an Illegal Government
   5.Selective Use of Violence for Propagandistic Effects

Armed Propaganda Teams (APTs)

   2.Combination: Political Awareness and Armed Propaganda
   3."Eyes and Ears" Within the Population
   4.Psychological Tactics, Maximum Flexibility
   5.A Comprehensive Team Program Mobile Infrastructure


   2.Initial Recruitment
   3.Established Citizens, Subjective Internal Control
   4.Organizations of Cells for Security
   5.Fusion in a "Cover" Organization


   2.Infiltration of Guerrilla Cadres
   3.Selection of Appropriate Slogans
   4.Creation of Nuclei
   5.Ways to Lead an Uprising at Mass Meetings


   2.Motivation as Combatant-Propagandist
   3.Armed Propaganda
   4.Armed Propaganda Teams
   5.Cover ("Façade") Organizations
   6.Control of Mass Demonstrations


   1.The Audience
   2.Political Oratory
   3.Qualities in a Speech
   4.Structure of a Speech
   5.Some Literary Resources



The first indictment of Defense Secretary Caspar Weinberger

see C:// file



June 25, 1992

The Independent Counsel statute provides that an "independent counsel appointed under this chapter may make public from
time to time, and shall send to the Congress statements or reports on the activities of such independent counsel."

Under the governing statute, Independent Counsel's responsibilities are threefold. First, he has an investigative role, 28 U. S. C.
Section 594. Second, he has a prosecutorial role, 28 U. S. C. Section 594. Third, he has a reporting role, 28 U. S. C. Section

The purpose of this report is to inform the Congress of the status of Independent Counsel's investigation and prosecutions in the
Iran/Contra matters.

Status of the Investigation

The criminal investigation of Iran/Contra is in its final phase. We are attempting to determine whether officials at the highest level
of government, acting individually or in concert, sought to obstruct official inquiries into the Iran Initiative by the Tower
Commission, the Congress and Independent Counsel by withholding notes, documents and other information, by lying, and by
supplying a false account of the 1985 arms sales from Israeli stocks and their replenishment by the United States.

The indictment of former Defense Secretary Weinberger by the grand jury on June 16, 1992, stemmed from that investigation.

A copy of the Weinberger indictment is attached. Independent Counsel has yet to determine whether additional proposed
indictments will be presented to a Grand Jury. That investigation should be completed this summer.

While pursuing the final phase of the investigation, the Office of Independent Counsel will proceed with the trial of three pending
cases, United States v. Clair E. Georqe, United States v. Duane R. Clarridge, and United States v. Caspar W. Weinberger.
The George case is set for trial on July 13, 1992, before U.S. District Judge Royce Lamberth. No trial date has been set for
the Clarridge case, but U.S. District Judge Harold Greene has stated that he hopes the trial can be held in October 1992. U.S.
District Judge Thomas Hogan has set a November 2, 1992, trial date for the Weinberger case. In addition, Independent
Counsel has been prepared to seek leave to appeal to the Supreme Court the reversal of the conviction of John M. Poindexter,
but is awaiting an appeals court ruling on Poindexter's petition for rehearing in that Court.

Independent Counsel is sensitive to concerns expressed by Members of Congress and others as to the length and the resulting
cost of the investigation. The investigation has continued for five and one-half years and has cost $31.4 million. This highly
complex investigation posed unique problems and circumstances that stretched out our work, which I will explain in more detail

To speed up the completion of our investigation, I announced last December the appointment of Craig A. Gillen as Deputy
Independent Counsel to direct the continuing investigation and the remaining trial work of the office, while I undertook to
complete the final report of our long period of activity. I have nevertheless maintained overall responsibility for the supervision
and direction of prosecutorial matters, spending one third of my time in Washington and returning to Washington full time in
April for the final consideration of the Weinberger indictment. Much of the report has been drafted, but in order to complete the
final phase of our investigation, and particularly while Mr. Gillen is trying cases in court, I shall continue full time in Washington
where we hope to complete our investigative work by the end of this summer.

Length of Investigation

In evaluating the cost and time involved in the effort of

Independent Counsel to carry out his assignment by the Appointing Panel, it is important to understand that the Iran/Contra
matters posed a number of highly complicated circumstances for a prosecutor. The Iran/Contra operations were intended by
the Reagan Administration to remain hidden. Because they were conducted in tandem with or in the course of covert activities,
once exposed, they could not be readily explored in open court because of the national security claims.

The operations were executed by high Reagan Administration officials in support of presidential foreign policy objectives. They
occurred in a broad geographic setting over a period of years. Their investigation required a thorough sifting of hundreds of
thousands of documents from some of the most sophisticated and secretive agencies of government. And, although there were
many witnesses to various aspects of these operations, the most central figures were not cooperative. There were few
government officers who volunteered information willingly.

It was imperative for Independent Counsel to focus first on the facts that might be the subject of immunized testimony, including
the diversion of funds from the proceeds of the Iranian arms sales to assist the Contras. It was necessary to gather as much
material as possible before Congress granted immunity to the most central figures in the affair. After immunity was granted, it
was necessary to shield our potential prosecutions from contamination by the highly publicized congressional testimony of
Oliver L. North, Poindexter and others who testified under immunity grants.

Once the first major indictment was brought in March 1988, Independent Counsel turned to trial work. In the North case
alone, 108 pre-trial motions were filed, thirty-two of which challenged the validity of charges in the 23-count indictment brought
against North, Poindexter, Richard Secord, and Albert Hakim.

The decision by U.S. District Judge Gerhard Gesell to sever the four defendants in the case to preserve the right of each of the
defendants to use the immunized testimony of others to exculpate himself necessitated separate trials and added more than a
year to the anticipated schedule. The immunity issues ultimately brought about the reversal of North and Poindexter's
convictions on appeal.

Classified information problems have also complicated Independent Counsel's prosecutions and consumed enormous time and
energy. Every line of every page of the thousands of pages of classified documents that might be used in trial by either the
prosecution or the defense has had to undergo review by a group of declassification experts from several agencies. Claims of
national security led to the dismissal of the central conspiracy charge against North, Poindexter, Secord and Hakim. Attorney
General Thornburgh's refusal to declassify publicly known but officially secret information forced the dismissal of the
government's entire case against former CIA Costa Rican station chief Joseph Fernandez -- and more than a year's litigation
was wasted. I have previously reported to Congress at greater length on these problems.

Crimes Charged and Tried

Independent Counsel has not been able to prosecute the basic operational crimes committed in the course of the Iran/Contra
affair due to national security claims. For instance, Count One in the North-Poindexter-Secord-Hakim indictment was
dismissed due to claims that material information could not be declassified. It charged a conspiracy to defraud the United States
by obstructing congressional oversight; by illegally supporting the Nicaraguan Contras; by depriving the government of the
honest and faithful services of employees free from conflicts of interest, corruption and self-dealing; and by exploiting and
corrupting for their own purposes a government initiative involving the sale of arms to Iran rather than pursuing solely the
government objectives of the initiative, including the release of hostages in Lebanon.

Independent Counsel has been able to prosecute the crimes committed in the course of the Iran/Contra cover-up. These have
including lying to and withholding information from Congress, lying to other official investigations, and withholding and
destroying documents.

Criminal charges have been brought against 14 persons in three venues, including three cases that have not yet come to trial.
Ten convictions have been obtained. The North and Poindexter convictions were reversed on appeal. The Fernandez case
never came to trial due to classified information problems.

The Office of Independent Counsel could not complete its work without questioning all significant witnesses and pursuing all
important leads related to the mandate issued by the Appointing Panel, a copy of which is attached. Because of the need to try
North and Poindexter separately, those two principals did not become available for questioning until mid-1990.

Since then, the continuing investigation was fueled by newly discovered documents, including the personal notes of key officials,
CIA cables and tapes, and other records previously withheld from Independent Counsel and other investigating bodies. These
were obtained by renewed emphasis on the fulfillment of longstanding document requests, originally made in 1987 to the
National Security Agency, the National Security Council, the CIA, the White House, the Office of the Vice President, and the
State and Defense Departments. Also of critical importance were changes in witness testimony.


In the past two years, the continuing investigation has developed new and disturbing evidence that made it necessary to
reinterview many of the witnesses first questioned in 1987. This was not merely a clean-up chore -- it has provided a significant
shift in our understanding of which Administration officials had knowledge of Iran/Contra, who participated in its cover-up, and
which areas required far more scrutiny than we previously believed.

It is not a crime to deceive the American public, as high officials in the Reagan Administration did for two years while
conducting the Iran and Contra operations. But it is a crime to mislead, deceive and lie to Congress when, in fulfilling its
legitimate oversight role, the Congress seeks to learn whether Administration officials are conducting the nation's business in
accordance with the law.

Respectfully submitted,


Independent Counsel




OLIVER L. NORTH, Defendant.
Criminal No. 88-0080 02 - GAG

You are instructed that the United States has admitted for purposes of this trial the following facts to be true:






by Gene "Chip" Tatum 12/28/96

Step 1:

Find a depository which fits the following criteria:

     1. Large cash reserves.

     2. Much of the cash reserves should represent deposits from an illegal activity (ie. drug transactions). For this example
     we will use Banco Nacional de Panamá, a depository which is protected by General Manuel Noriega. The depositor will
     be Pablo Escobar. Finding the proper depository would be the function of the CIA, and in this example we will use
     William Casey.

Step 2:

Arrange for a loan from this depository. We will use the name of George Bush in this example for the person obtaining the loan.
We will use the amount of $8 billion for this example. Sometimes the depository will not be very cooperative. If this occurs, the
CIA will coerce or intimidate the depository officials into cooperating. Ultimately, the loan will be made.

Step 3:

Split the loan proceeds in half. One half ($4 billion) will be sent to Iran to purchase "super bills" at the rate of two "super bills"
for one authentic bill. Thus, $4 billion in cash buys $8 billion in "super bills." (NOTE: A "super bill" is a perfectly counterfeited
U.S. bill. These bills are printed by an Intaglio press which was sold to the Shah of Iran in the late '60s, early '70s. The Shah
was also given the plates, ink and paper necessary to successfully print U.S. dollars in large denominations. This was given to
the Shah by the CIA. Unfortunately, the Shah left the press, plates, ink and paper for the Iranian Revolutionary Councils when
he fled in late 1978.) The second half of the loan ($4 billion) will be sent to a CIA launderer selected by the CIA (Casey) for
his or her ability to move large sums of money around the world as a matter of ordinary business. For this example we will use
the name Nana Debusia. (Debusia is the grandson of Guyana's first democratic leader and owner of many U.S. and foreign

Step 4:

Repay original loan to depository in "super bills." (Give Banco Nacional de Panamá $8 billion in "super bills" to replace the
authentic currency it loaned.) These "super bills" are placed in the reserve vault and, as long as they are not withdrawn by the
depositor, their existence will not jeopardize the value of the U.S. dollar. But, because they are perfect in every way, to put the
"super bills" in circulation would eventually devalue the U.S. dollar by flooding the monetary marketplace with U.S. currency.

Step 5:

Arrange to sell Iran something of value for the authentic currency used to purchase the "super bills." In this example, we will use
arms, ammunition and replacement parts for military equipment. (We will use the name Oliver North as the example of a person
arranging the sale of arms to Iran.) In other words, the CIA now arranges to sell Iran $4 billion worth of arms and equipment in
order to get the original $4 billion of authentic currency back. Now, the CIA has $4 billion to use in funding covert activities
without relying on Congressional authority and funding. If caught, the CIA can report the source of funds as being from an arms
transaction with Iran.

Step 6:

Ensure that the "super bills" are not withdrawn. This is done through the process of neutralization of the depositor.
Neutralization is the use of intimidation, coercion or intimidation. In this example, Pablo Escobar is killed.

Step 7:

This CIA launderer in possession of one-half of the original loan proceeds is moving his $4 billion through a maze of banks
which are cooperative with both the launderer and the CIA. For this example, we will use the following trail of deposits to
banks: a bank in Spain; the Vatican Bank; banks in Luxembourg. Then the launderer wires from his London offices $3.8 billion
in laundered monies to private numbered accounts being controlled by the original architects. The launderer keeps $200 million
for his job well done, leaving the $3.8 billion in the numbered accounts.

Step 8:

Neutralize the CIA launderer. In this example Nana Debusia was indicted by the U.S. on 32 counts to include bank fraud. The
CIA stepped up in his behalf and stated that it would not be in the best interest of the U.S. to prosecute Debusia. He was
facing several hundred years in prison if convicted. He was subsequently acquitted on all counts.


$4 billion for use in unauthorized black ops* (*black operations are those covert operations performed without the knowledge
or authority of Congress.) $3.8 billion in private numbered accounts controlled by the architects of the funding operation.


To summarize the example, the Director of the CIA, William Casey, approached the Ex-Director of the CIA and current Vice
President of the United States, George Bush, with the name of a vulnerable depository, the Banco Nacional de Panamá. Vice
President Bush then arranged for a short term loan of $8 billion. Bush arranged for $4 billion to go to Iran to purchase super
bills and $4 billion to go to Nana Debusia to be laundered into several private accounts. He (Bush) commissioned Oliver North
to oversee the Iranian connection. North delivered $4 billion in U.S. currency to Iran. Iran gave North $8 billion in super bills in
exchange for the $4 billion in good U.S. currency. North then delivered the $8 billion in super bills back to the Banco Nacional
de Panamá. The loan transaction is now complete. There is $8 billion in super bills in the reserve vaults of the Banco Nacional
de Panamá, there is $4 billion in authentic U.S. currency in the hands of the Iranians, and there is $4 billion in good currency
with CIA launderer Nana Debusia. North sells the Iranians military hardware and parts for the amount of $4 billion and diverts
a portion of the proceeds to the Contras of Nicaragua (Iran/Contra). Nana Debusia, in the meantime , is laundering the
deposits of $4 billion through various banks, including the Vatican's bank in Italy. After several successful banking transactions,
Debusia presents $3.8 billion in the sound deposits to numbered accounts in various locations. When the funding operation is
complete, there is $4 billion in CIA accounts to be utilized for covert and black operations; there is $3.8 billion in private
numbered accounts controlled by George Bush and William Casey. Pablo Escobar, the primary depositor is dead to ensure no
one will withdraw the super bills. General Noriega is in U.S. federal prison and under constant U.S. guard to ensure his silence,
and William Casey is dead, leaving $3.8 billion in good U.S. currency in the control of George Bush.

If you have comments or suggestions, email The BIG SKY PATRIOT at mtpatriot@imt.net

Since January 22, 1997 this page has had 52,834 accesses.



Iran-Contra Affair

Iran-Contra Affair, American political scandal of 1985 and 1986, in which high-ranking members in the administration of President Ronald Reagan arranged for the secret sales of arms to Iran in direct violation of existing United States laws. Profits from the $30 million in arms sales were channeled to the Nicaraguan right-wing "contra" guerrillas to supply arms for use against the leftist Sandinista government. This, too, was in direct violation of U.S. policy. The chief negotiator of these deals was Lieutenant Colonel Oliver North, a military aide to the National Security Council. North reported his activities initially to National Security Adviser Robert C. McFarlane, the council's head, and subsequently to his successor, Vice Admiral John M. Poindexter. The sale of arms to Iran was initiated at the suggestion of the Israeli government with the dual goal of bettering relations with Iran and of obtaining the release of American hostages held in Lebanon by pro-Iranian terrorists. North was instrumental in setting up a covert network for providing support to the contras, with its own ship, airplanes, airfield, and secret bank accounts.

In November 1986 a Lebanese magazine disclosed that the United States government had negotiated an arms deal with Iran. Later that month Attorney General Edwin Meese verified that millions of dollars from these sales had been sent to the contras in direct violation of the Boland Amendment, which Congress had passed in 1984 and which prohibited direct or indirect U.S. military aid to them. As new details of the widening scandal emerged, a series of congressional and legal investigations began. In February 1987 the Tower Commission, a special panel headed by former U.S. Senator John Tower of Texas, issued a report castigating President Reagan and his advisers for their lack of control over the National Security Council. The Congressional Joint Investigative Committee collected more than 300,000 documents, conducted more than 500 interviews and depositions, and listened to 28 witnesses in 40 days of public hearings. In November 1987 the committee reported that the president bore the ultimate responsibility for the implementation of his administration's policies but found no firm evidence that he had known of the diversion of funds to the contras. In May 1989 North was tried and convicted of obstructing Congress and unlawfully destroying government documents, but his conviction was subsequently overturned. A guilty decision on Poindexter's actions was also later reversed. The scandal's reverberations concerning the ultimate responsibility for the operation continued into the 1990s. In December 1992 President George Bush, who had been vice president under Reagan and who had also been implicated, but not charged, in the scandal, issued pardons to many of the top government officials who had been charged or convicted for their role in the Iran-Contra affair. Independent prosecutor Lawrence E. Walsh published his final report on the investigation of the affair in January 1994. Walsh concluded that there was no evidence that Reagan had broken the law, but he noted that Reagan may have participated in, or known about, a cover-up.

"Iran-Contra Affair," Microsoft® Encarta® Online Encyclopedia 2000

© 1993-2000 Microsoft Corporation.
All rights reserved.



Volume I:
Investigations and Prosecutions
Lawrence E. Walsh
Independent Counsel
August 4, 1993
Washington, D.C.


Division for the Purpose of Appointing Independent Counsel
Division No. 86-6



     Letter of Transmittal iii
     Executive Summary xiii
     Summary of Prosecutions xxiii

     Part I The Underlying Facts 1

     Part II History of the Investigation 25

     Chronology of Key Public Developments 51

     Part III The Operational Conspiracy:
     A Legal Analysis 55

     Part IV Investigations and Cases:
     The National Security Council Staff 77

          Chapter 1 U.S. v. Robert C. McFarlane 79
          Chapter 2 U.S. v. Oliver L. North 105
          Chapter 3 U.S. v. John M. Poindexter 123
          Chapter 4 Paul B. Thompson 137
          Chapter 5 Fawn Hall 147
          Chapter 6 Robert L. Earl 151
          Chapter 7 Thomas C. Green 155

     Part V Investigations and Cases:
     The Flow of Funds and the Private Operatives 157

          Chapter 8 The Enterprise and Its Finances 159
          Chapter 9 U.S. v. Richard V. Secord 173
          Chapter 10 U.S. v. Albert Hakim 179
          Chapter 11 U.S. v. Thomas G. Clines 181
          Chapter 12 Swiss Funds Recovery Efforts 185
          Chapter 13 Private Fundraisers (U.S. v. Carl R. Channell and U.S. v. Richard R. Miller) 187
          Chapter 14 Other Money Matters 193

     Part VI Investigations and Cases:
     Officers of the Central Intelligence Agency 199

          Chapter 15 William J. Casey 201
          Chapter 16 Robert M. Gates 223
          Chapter 17 U.S. v. Clair E. George 233
          Chapter 18 U.S. v. Duane R. Clarridge 247
          Chapter 19 U.S. v. Alan D. Fiers, Jr. 263
          Chapter 20 U.S. v. Joseph F. Fernandez 283
          Chapter 21 CIA Subject #1 295
          Chapter 22 James L. Adkins 309
          Chapter 23 Conduct of CIA Officers in November 1986 311

     Part VII Investigations and Cases:
     Officers of the Department of State 325

          Chapter 24 George P. Shultz, M. Charles Hill and Nicholas Platt 325
          Chapter 25 U.S. v. Elliott Abrams 375
          Chapter 26 Edwin G. Corr 393

     Part VIII Investigations and Cases:
     Officers of the Department of Defense (U.S. v. Caspar W. Weinberger and Related
     Investigations) 405

     Part IX Investigations of the White House 443

          Chapter 27 President Reagan 445
          Chapter 28 George Bush 473
          Chapter 29 Donald P. Gregg 485
          Chapter 30 Donald T. Regan 505
          Chapter 31 Edwin Meese, III 525

     Part X Political Oversight and the Rule of Law 555

     Part XI Concluding Observations 561

     Index 567

Source for this document


The Consortium


Lost History: Dole Nearly Cited in Iran-Contra Report

By Robert Parry

Special prosecutor Lawrence Walsh was so outraged by Sen. Bob Dole's disruption of the Iran-contra criminal cases against senior Reagan-Bush officials that Walsh "briefly considered" adding a chapter to his final report criticizing Dole's tactics.

Walsh detailed Dole's strategy for hindering the prosecutions in Firewall, a book scheduled for publication next year. Walsh, a lifelong Republican, released two chapters now to show voters how Dole lobbied President Bush to pardon former Defense Secretary Caspar Weinberger in 1992. Because of that position, Walsh deemed Dole's recent demands that Clinton eschew pardons for Whitewater defendants a clear case of "Dole's hypocrisy."

The two chapters offer other insights as well into how Bush and Dole engineered the Iran-contra end game to minimize political damage to the Republican Party. Their strategy succeeded, in part, because some leading Democrats and influential members of the Washington news media signaled acceptance of the Weinberger pardon.

Bush pardoned Weinberger and five other Iran-contra figures on Christmas Eve 1992, less than a month before Bush was to leave office. The Weinberger pardon spared Republican superstars, such as Colin Powell and possibly Bush himself, from the embarrassment of testifying and opening themselves to the risk of perjury charges.

After Bush left office, the ex-president soon reneged on an understanding that he would submit to a full-scale interview with Walsh about Bush's real involvement in the scandal. Walsh had postponed the questioning until after the presidential election to spare Bush from the distraction.

Angry Walsh

In ducking the interview, Bush was aided again by Democratic timidity and an apathetic Washington press corps. Bush's avoidance of the testimony was barely mentioned deep inside the major national newspapers in early 1993. Yet outside the media's gaze, there was a big story missed. Privately, Walsh was considering possible indictment of the ex-president, especially given Bush's failure to produce his notes from 1986-87 until Dec. 11, 1992.

"We continued investigating how Bush's notes came to be withheld and what role he had played in the 1986 cover-up," Walsh wrote. "Griffin Bell, a former attorney general [under President Carter] who was now counsel to President Bush, asked me to announce that Bush was no longer a subject of our investigation. I, of course, refused."

When Bush balked at a full-scale interview, "my immediate instinct was to use the grand jury and subpoena Bush," Walsh wrote. "In this I was alone. The staff unanimously opposed the use of the grand jury, arguing that to do so would exaggerate public expectations and would appear retaliatory. ...I gave up. We then turned our full attention to our final report."

Walsh "briefly considered adding a chapter on Senator Dole's intrusion into our [perjury-obstruction] case against Weinberger, but I did not want to divert attention from the importance of the case itself and Bush's pardons," Walsh wrote. The final chapter explained both the historical events of the Iran-contra scandal and the criminal matters investigated.

Dole's repeated disruptions of that investigation had surprised Walsh, who claimed to have long respected Dole as a Republican leader. "I had once felt a certain kinship with Dole as a fellow mainstream Republican," Walsh wrote. "Perhaps because of my previous favorable impression of Dole , I was doubly shocked that he would so openly intrude in a federal prosecution. ...

"This type of influence-peddling is generally left to party fixers, who are important within a political organization itself but not usually the public party leaders. ...It was surprising to me that a Senate leader -- especially one who seriously aspired to the presidency -- would use the power of his office directly or indirectly to influence the outcome of a criminal case being prosecuted by the federal government. Never during my service at the Justice Department, the district attorney's office, or the governor's office had I encountered one instance of a U.S. senator's trying to influence the disposition of a pending case."

Dole Attacks

But Dole put on a full-court press to harass the Iran-contra investigators, especially after a re-filed Weinberger indictment on the Friday before the 1992 election hurt Bush's drive to overtake Bill Clinton in the polls.

In a Nov. 9, 1992, letter, Dole demanded that Walsh fire James Brosnahan, a San Francisco lawyer who had been brought in to try the Weinberger case. Dole attacked Brosnahan's past involvement in Democratic politics. When Walsh refused, Dole's spokesman Walt Riker said Walsh's response did "not address the active, liberal agenda of Mr. Brosnahan and, obviously, it is politics at its worst."

On Nov. 11, four GOP senators followed Dole's urging and demanded a special prosecutor to investigate Walsh, the special prosecutor, particularly over whether the new Weinberger indictment had been timed for political reasons, though there was no evidence that was the case.

Walsh believed that the Republicans feared the Weinberger trial would prove a high-level GOP cover-up of the illegal actions that had permeated the secret sale of arms to Iran and diversion of profits to the Nicaraguan contras. In turn, that could have damaged the Reagan legacy and future Republican presidential campaigns, such as Dole's.

So Dole continued to play the hatchet man. "It is time for Mr. Walsh and his staff to plead guilty to playing politics for their taxpayer-funded inquisitions," Dole declared. "As of August [1992], Walsh had billed taxpayers for more than $5.6 million for office space, $881,000 for incidental expenses, $401,000 for maintenance, $698,000 for contractual services, and a whopping $665,000 for per diem and subsistence, including $300,000 for personal living expenses and an estimated $65,000 in room-service meals."

By late November 1992, Dole was openly advocating Weinberger's pardon. By December, he was demanding a list of all Walsh's employees so the Republicans could mount personal investigations and judge each "employee's objectivity and impartiality." The senator also obtained information about the staff's pay levels. "With the election over, maybe the Walsh political operatives will decide to pack it in," Dole wished. "The only mischief left for them is more humiliating courtroom defeats."

On Christmas Eve, Dole got his final Iran-contra wish. Bush pardoned Weinberger and five others, effectively ending Walsh's investigation and blocking a full public view of the Iran-contra cover-up.

(c) Copyright 1996


George Bush: The Unauthorized Biography

by Webster G. Tarpley & Anton Chaitkin

Chapter -XVIII- Iran- Contra


Interview with Michael Levine

from The People's Spellbreaker
edited by John DiNardo

ROBERT KNIGHT: This is UNDERCURRENTS for Monday, November 11th, 1991. I'm Robert Knight, with Paul DeRienzo in the field, at the Marble Collegiate Church in New York City where Saturday there was held a conference -- a 100-city national teleconference called, "Causes and Cures: A National Campaign on the Narcotics Epidemic." Present at that teleconference were such experts in the drug field as Michael Levine, Peter Dale Scott, Alfred McCoy and Daniel Sheehan of the Christic Institute.

In today's program, we'll be hearing a special interview, conducted by Paul DeRienzo, with former United States Drug Enforcement Agency officer Michael Levine.

13. Michael Levine, Consulting STONE RIDGE NY law experts. This Website is hosted by ExpertPages
Michael Levine, Consulting P.O.BOX 533 STONE RIDGE, NY 12484 914-687-9642
MICHAEL LEVINE, is a world reknowned, 25 year veteran Federal law enforcement officer with service in 4 Federal agencies (IRS
Intelligence, US Customs
1/24/2000 http://expert.expertpages.com/mlevine