Drugs, Law Enforcement and Foreign Policy

8. Par, 100th Congress | i 100-165 COMMITTEE PRINT i { DRUGS, LAW ENFORCEMENT AND FOREIGN POLICY. A REPORT [PREPARED BY ‘118 SUBCOMMITTEE ON TERRORISM, NARCOTICS AND. Erno 2S "OPERATIONS “OF THE coMMNDTER ON: FOREIGN RELATIONS " UNITED STATHS SENATE Printed for the use of the Committee on Foreign Relations US. GOVERNMENT PRINTING OFFICE 96-845 WASHINGTON ; 1989 For eale by the Superintendent of Documents, US. Government Printing Office ‘Washington, DC 20402LETTER OF TRANSMITTAL US. Sears, Connor oN FOREIGN RELATIONS, Washington, DC, April 13, 1989. Hon, Craronwe Pet, Chairman, Committee on Foreign Relations, US. Senate, Washington, DC. Dear Ma, Cnamuay: Two years"ago, you directed the Subcom- mittee on Narcotics, Terrorism and International Operations to conduct an investigation regarding the links between foreign icy, narcotics and law enforcement in connection with drug traf- from the Caribbean and Central and South America to the United States. This Report is the final written product of that investigation in the 100th Congress. Pursuant to your direction, the Subcommittee conducted four. teen days of open hearings, nine executive sessions, and received testimony from 27 witnesses. In addition, the staff deposed an additional 20 witnesses. Thirty subpoenas were issued, many calling for the production of extensive documentation. Subcommittee’s investigations resulted in a wide-ranging review of past policies and practices in handling foreign policy and the war on drags. Itis our privilege to transmit the report contain- jing findings and conclusions based on the investigation, a country- by-country analysis of the drug problem as it has affected US. foreign policy in Latin America, a review of drag links to the Contra movement and the Nicaraguan war, of money laundering, and of issues involving conflicts between law enforcement and national security. Appé to the report detail allegations of how the Com- rlttess initial investigation in 1986 may have beon interfered We very much appreciate the support and assistance you have given us throughout the course of this investigation. I would like to note our personal appreciation for the efforts of the personnel who handled westigation: Special Counsel Jack A. Blum, Kathleen ‘Smith, and Jonathan Litchman of the Committee Staff; and Rich- ard McCall, Jonathan Winer, and David McKean of Senator Kerry's personal staff, along with Senator Kerry's former administrative assistant, Ron Rosenblith. This report would not have been possible without their dedicated work. owwv ‘The Subcommittee believes that this i strated that the drug cartels pose a continuing security at home and abroad, and that the United States has too often in the past allowed other foreign policy objectives to interfere with the war on drugs. The Subcommittee hopes that this Report will contribute to better understanding by the Congress of this problem, and to constructive legislative proposals which may allow us to avoid repeating the mistakes of the past. Sincerely yours, Joun Kerry, Chairman, Brock Apans, Dantex P. Movnnian, CONTENTS a a geen ‘Administrative Recommendations. etre poe Boman a acme HEE @NBC Nigy Neve Apr 90,186 State Depart SG he ace Detar 2 idge “ue Man bee ‘ip Mla eral, Sons i Melee aes Said ert Gopvar ‘Statoments, Carlos Soto, in ro: Luis Rodrigues, June 17, 1987 .. onda a of Law ees Tava Report, Suge Sarl pel URNS tars ctor aes He = oe ae = ee ‘Teletype to FEE Director re Zavala/Cabeaas rn $00 {GBS Brenig New, Sune 1.10935. ee 10 ee eines sacra me s Fete ear techaloar Tee Conn imac to elon Savador os Tak Wiorda Abert Lessing Declaration ac Sc eee fee Pi Canc os Customs Report, intervies i vith Bak Menorandas om Tiersen tise ‘8 aoe ieee ayaa ‘Supe 1865. 285 5, Pann malty oto diel ig ‘The Times Union, Juno 10, 1 "it rater ae m5 Nia ict Ment,” fase t2iSoe Sena? Se NBG Nihtly Neve, February 21a Revers Eetrasey is ek ee a Ae Rega Bet, "Now See Blbadiag Chand Hoi, ™ Ps Aa B17 ‘Rap, Boguaa/ Caper Boccnbor 1838 5 Eee November 1 Uti, internal Say Sesion, * Criminal! vitor, Jase wr Chentian Sconce anton ; aS ii ind Wo Gr Unie Wo Goakea Tenders” Mag’, 988 arren gat of dua, Memo, frog Ken Bergaust fo Slog oil vo " Gptng "Cir earag nt Sonata Pres Hao Comic,EXECUTIVE SUMMARY AND CONCLUSIONS “Tho American people must understand much better than they ever have ig eh ps ow ln atty and tht of ur children sheet by Latin the Lined Sates han any thet are centred in osow © That warning was delivered in Subeommitto testimony by Gen eral Paul C. Gorman, now retired and formerly head of U.S. South- ‘erp Command in Panama. Such 2 characterization, coming from an individual who served with such distinction in the United States ‘Army, should not be taken lightly. ‘There should not be any doubi in anyone’s mind that the United States is engaged in a war directed at our citizens—the old, the ‘young, the rich, the poor. Bach day, with what has become a numb- ing regularity, the American people are besieged with the news of the latest casualties in the drug wan ‘The Colombian drug cartels which control the cocaine industry constitute an unprecedented threat, in a non-traditional sense, to the national security of the United States. Well-armed and operating from ‘secure foreign havens, the cartels are responsible for thousands of murders and drug-related deaths in the United States each year. They exact enormous costs in terms of violence, lower economic productivity, and misery across the nation, ‘The American criminal justice system has been overwhelmed by the drug war. To date, most of the US. law enforcement efforts have been directed at the domestic drug distribution network. The result is a criminal justice system swamped with cases which cannot be processed fast enough, jails that are overflowing with prisoners, a greater influx of cocaine than when the war on drugs was declared in 19883, and a cheaper, higher quality produet. ‘As. recent study sponsored by the Criminal Justice Section of the American Bar Association noted: ‘A major problem reported by all criminal justice partici pants is the inability of the criminal justice system to control the drug problem . . . through the enforcement of the criminal law. Police, prosecutors and judges told the Com- mittee that they have beon unsucceasfuul in making a sig. nificant, impact on the importation, salé and use of illegal drugs, despite devoting much of their resources to the arrest, prosecution and trial of drug offenders.” Attempts to interdict the flow of drugs at the border, while important, has experienced only marginal success. According to US. officials in the vanguard of the war on drugs, at best, interdiction Sobeommitte testimony f General Pal German, Pas 2, Februsry 6, 1988, p21. ® Grmdual Jaren Cae & Heport tothe Amurican Pople an the dmerdsan Bir on Crii- sil Justice inthe United Sta, Atperiean Bar Asoaaton, Ceiminal Satoe Sesion, Washing (on, Be, November 1888, a2 results in the seizures of only 15 percent of the illegal narcotics coming into the country. For the drug cartels, hose Seaton abilities staggor the imagination, a'15 percent loss rate is more Demand reduction through education and rehabilitation are critical elements in the war on But most experts acknowl that even this strategy will require a considerable period of time before major inroads are made into significantly reducing cocaine “the narvotcs problein is a national __The narcotics problem is a national security and forei i issue of ions. Tho drag cartels are 0 large and powerful that they have undermined some governments and taken over others in our hemisphere. They work with revolutionaries and terrorists'They have demonstrated the power to corrupt military and divilan institutions alike. Thetr objectives corously jeopardize . fore interests jectives throughout Latin Amer- leu and ie Cortiecn Pein ee committee investigation has led jowing conclu- sous nad wecommneiatioogs {othe following concl ‘Past FAmLores —In, the past, the United States government has either failed to acknowledge, or underestimated, the seriousness of the emerg- ‘ng threat to national security posed by the drug cartels. The reasons for this failure should be examined by the Senate Select ‘Committee on Intelligence, in, concert with the Senate Committee on Foreign Relations, to determine what eorrective steps should bo taken, —In some instances, foreign policy considerations interfered with the U.S ability to fight the war on drugs. Foreign policy pri- grities towards the Bahamas, Honduras, Nicaragua, and Panama at times delayed, halted, or interfered with U.S. law fenforcement’s efforts to: keep narcotics out of the United States, In a few cases within the United States, drug traficke ers sought to mani ial system by providing servioes in support of U.S. foreign policy, with rainy resale —U'S. officials involved in Gentral America failed to address the drug issue for fear of jeopardizing the war efforts against Nica ragua. —The war against Nicaragua contributed to weakening an already inadequate law enforcement capability in the region which was exploited casily by a variety of mercenaries, pilots, and others involved in drug smuggling. The Subcommittee di not find that the Contra leaders personally were involved in drug trafficking. There was substantial evidence of drug smuggling through the war zones on the part of individual Contras, Contra suppliers, Contra pilots, mercenaries who worked with the Contras, and Contra supporters throughout the region. —Mhe saga of Panama's General Manuel Antonio Noriegs rope: sents one of serious foreign policy failures for the United States. Throughout the 1970's and 1980's, Noriega was able to manipulate U.S. policy toward his country, while eiill- fully accumulating near-absolute power in Panama. It is clear 8 that each U.S. government agency which had a relationship with Noriega iurned a blind eye to his corruption and drug. dealing, even as he was emerging as a key player on behalf of the Medellin cartel. Pouicy AND Prionrimes “International drug trafficking organizations are @ threat to US. national security. Our government must ist acknowledge that the activities of the drug cartels constitute a threat of such magnitude and then establish a more coherent and consistent strategy for dealing with the problem. The threat posed by the drug cartels should be given a major prority in, the bilateral agenda of the U.S. with a number of fountries, including the Bahamas, iat, Colombia, Bolivia and Paraguay. It, shot ‘among the most important, issues wit a number of other countries, including Mexico and Honduras. —In order to signal to. other countries the seriousness with which ‘the United States regards the drug issue, the President should ‘eonvene a summit meeting of Latin American leaders to begin developing a strategy to deal with this issue and related eco- nomie problems. —-Nareotics law enforcement has often taken a back seat to other diplomatic ané national security priorities, The war on druge must not in the future be ‘to other foreign policy considerations. ApMINisTRATIVE RECOMMENDATIONS. ~The Treasury Department should begin negotiations on gathering information on large foreign USS. dollar deposits, as authorized by the 1988 Ombibus Drug Bil —The State Department should make a special effort to control multiple entry visas from countries which are major drug transit countries'or which harbor major drug organizations. The Federal Aviation Administration should undertake 2 major effort to ‘hundreds of substandard aircraft, many of which are used for smuggling illegal narcotics. These aircraft, are located throughout the United States, and those which do not meet FAA specifications should be grounded immediately. Individuals who represent themselves as working for the CIA or other national security agencies of the United States Gov- ferment, and who in fact do not, should be prosecuted prompt- ly to the full extent of the law. . —An‘US: law enforcement agencies should devote significantly eater attention to counter-intelligence in order to prevent rug traffickers from penetrating their operations. The existing distrust among law enforcement agencies working ‘on the drug problem and national security agencies must be re- solved. Ways must be found to make it. possible for law enforcement agencies to have access to national security intelligence information related to the drug threat. : —Federal salaries of senior prosecutors and investigators must bo faised and special Senior Executive Service positions cre-ated in order to encourage the most talented and experienced - personnel to remain on the job. * ‘Spromc Lecistavive RECOMMENDATIONS —The President should be, given a series of optional sanctions to apply fo major, drug producing and drug transit, countries which have not fully cooperated with the U.S. in drug enforcement efforts. This Would allow the President to certify a nation under the national security provision of 481¢)@XaKiMID, and thus avoid the mnandatory sanctions contained in current law, while still giving him other’optional sanctions. ‘The proposed sanctions would include: prohibiting ships that have.stopped at such’ nation within 60 days-from discharging passengers or cargoin the U.S, denying landini rights in the U.S. tothe na- ory fom any euch nation to Spt inwpetione uaransnes, or ers from any 6 to! ions, quarantines, or ther additional regulations to prevent them from being used to transport prohibited substances to the United States; denying or limiting non-immigrant visas to nationals of any such nation; ‘eliminating Customs preclearance agreements with any such nation. No government omployee or official with responsibility for nar- ‘oties issues in either the Executive or Legislative branches of government should be permitted to represent a foreign government on narcotics matters for a period of three years after they, leave, The penalties for, violating, such a, prokii should be the sathe as for violations of the Federal Regulation pf Lobbying Act of 1946. 7 —The Department of State should be required to notify the Con- gress within 10 days-whenever it denies a-reqnest from law enforcement for reasons. of national security or foreign. policy. ‘The notification should include a full description of the reasons for the-refusal. Past decisions by the Department of State to end law enforcement operations on such grounds should have Deen subject, to Congresiional review: this provision would ensure yngress remain in a position to exercise oversight over such decisions, rae —The Department of State should be prohibited from entering into contracts with any individual or company under: indictment or convicted of any narcoticselated offenses, including money laundering. The Department should be required to institute procedures by which it would routinely check with the EBL, Customs and DEA to determine whether a company or individual is under investigation before the Department enters into any contract with the company or individual. —No U.S. intelligence agency should be permitted to: make any ‘payments to any person convicted of narcotics related offenses, except as authorized in writing by the Attorney General in connection with the investigation or prosecution of criminal activity. —The Neutrality Act should be amended to apply only to actions which are not specifically authorized by the State Department. Each such authorization would require prompt notification by 5 the State Department to the House and Senate Foreign Affairs and Foreign Relations Committees, and Select Committees on Intelligence, The annual drug certification report should be required to ‘review links between international narcoties trafficking, money laundering and international terrorism (including guer- qilla groups on the right and the left with regard to ideology.) the National Director of Narcotics Policy should be required to report to the Congress on current U.S. federal personnel practices affecting all persons engaged in the war on drugs to Astermine whether adequate resources are being devoted to hiring, training, promotion, and retention of federal employees responsible for narcoties matters. INTRODUCTION Ontcmis anp MetiopoLocy In early 1986, Senator John Kerry began @ staff investigation of allegations that elements of the supply network supporting the Nicaraguan contras were linked with drug traffickers. In April, 1986, Senator Kerry took information he had developed to the Chairman of the Foreign Relations Committee, Richard Lugar, who agreed to conduct a staff inquiry into those allegations. "in response to a request by Senator Kerry, Senator Lugar scheduled @ closed session of the Committee on Foreign Relations on June 25, 1986, to discuss these allegations and to determine whether or not adequate attention and priority was being given to international narcotics law enforcement. efforts generally. Senator ‘Kerry ‘was concerned that because of the preoccupation with other foreign: policy. priorities relating to several. nations, the United States was not dealing adequately with the growing’global drug "At that meeting, Senator Kerry raised questions as to the willingness of the Administration to investigate allegations of drug trafficking tovelving the Contra supply network. and the apparent reluctance to deal-with Bahamian drug corruption for reasons of ational security. Senator Kerry noted that witnesses who had brought this information to his attention had also allegations of drugrelated corruption concerning Nicaraguan officials. ‘In response, the Committee, at the direction of the then-Chair- man Senator Richard Lugar, decided that an investigation of drug allegations relating to the war in Nicaragua should be undertaken. Jn February 1981, at the direction of Chairman Claiborne Pell, the Committee continued its investigative efforts, expanding the focus to include the impact of drug trafficking from the Caribbean, and Central and South America on U.S. foreign policy interests, In ‘April, the responsibility for the investigation was given to the Sub- ‘committee.on ‘Terrorism, Narcotics and International Operations chaired by Senator Kerry, with Senator McConnell serving as the ranking member. "The Subcommittse conducted fourteen days of open hearings, nine executive sessions, and received testimony from 27 witnesses. Tn addition, the-staff deposed an additional 20 witnesses. Thirty6 subpoenas were issued, many calling for the production of exten- “tke Committee: sought, and recsived, documents from a large , and rece en a number of government agencies, including the Drag Enforcement Administration, the Federal Burons of Lavestigatig, tie beset ‘ment of Defense, the of the Army, the Central. Intell ence Agoncy, the Defense Intelligence Agency, the US, Customs vice, the Department of State, the Department of the ivessury, the Overseas Private Investment Corporation and the National Se. OH aSditony the fall Rela i ition, Committee: conducted extensive questioning Gf oftals on the goval mareaics pglese 1987 ‘1988 in response to the annual International Narcotics Caaw eens gehen ron 2 : Jaw requires the President to certify that major ilicit 4 100. ing country or a major drug-transit country cooperated fully with ‘the United States in the previous year, or took adequate steps on = orm wail respect ‘to illicit drug production, ing and money la : ae wort Mares 200 intoradGcanl Cnernions oar ie nee 1 at tee on International Beonomie Police ons ne PP In perparation for the hearings the staff interviewed dozens of people, and out of government. Many of these intorviows were ept confidential to ensure’ candid discussions. The Subcommittee ‘traveled té Costa Rica wher# depositions were take and interviews conducted with present and former government officials. By agreement with Chairman Denil Inouye ofthe Shab Select, uae Oppostons the Sd seca eye a aa eae Nie guan ‘st ~ the ‘investigation | cleared to review the documeits provided to the Select Committee investigation. sit ri eat ae iver trig the ‘the “North ‘Disries.” practice of Federal and State prosecutors, who routinely rely on convicts as witnesses in criminal ‘trials because they are the ones ‘with the most intimate knowledge of the criminal activity. ‘All witnesses who appeared before the Subcommittee, did so under oath and the threat of prosecution for perjury. The Subcom. mittee did not and vould not offer reduced sentences in exchange for testimony: Before using’ the testimony of convicted felons’ in a public session, the Subcorimittee staff attempted to corroborate the ilnased lores Many of the witnesses wero considered. cus ciently credible to have been used by prosecutors in grand jury investigations and trials, including the major federal narcoties pros. ecutions of General Norioga, Medellin cartel leader-Carlos Lehder, and officials in Haiti and the Bakamas. Gaining access to convicted felons arrangements to have them testify required the cooperation of the-Departimont of 1 Justice and numerous: U.S. Attorneys. In some cases the coopera tion was excellent, while in others the Subcommittee confronted one difficulty after another which delayed the investigation and complicated the presentation of testimony in public hearings. As this report is read, it should be kept in mind that the purpose of the investigation was to identify the nature of the threat posed by international drug cing and the adequacy of the U.S. gov- runt resovne ta tho thre. Tho Subcommitiee was interested inthe larger policy questions and was.not seeking to develop spe- ‘Tam Scope or ra THREAT When the Senaté Committee on Foreign Relations bogan its in- Teigation tre yous ago foto drug s otict law enforcement, reign policy, this issue was wi ‘as being primarily a law enforcement problem. While public debate over the drug problem focused on improving international and domestic law enforcement efforts, the sae, capably and activities of the cartels were rai ing. "There are probably few issues which have eaused greater strains in our relations with other nations, particularly with our Latin American néighbors, than that of international drug trafficking. ‘The problem has given rise to a growing frustration in the Con- gress over the seeming inability of many nations in the hemisphere to elitninate or the production or transshipment of cocaine and marijuana destined for marketing in the United States. On the other hand, there are valid concerns on the part of our Latin American allies that were it not for the demand problein in the United States, the drug issue would'be of more manageable propor- tons. ‘After two years of investigation carried out under the auspices of the Subcommittee on Narcotics, Terrorism and International Oper- ations, it is apparent that the United States is facing a significant national security problem. It is a problem serious enough for us to reexamine ur perception as to what constitutes national security ‘threats to ourselves and our friends around the world. ‘In the post-World War II era, the national security focus of the United States was famed by our predominant concern with East- West competition around the globe. This concern with Marxist ex: pansionism in general, and Soviet expansionism in particular, led us to take a series of extraordinary steps to respond to the threat. These steps ranged from implementing the Marshall Plan for West- ern Europe, to esteblishing NATO and other military alliances around the world, to fighting conventional wars in both Korea and Vietnam. As the United Stet enters the decado of the 1900s it is clear ‘that the operations of the ‘international drug organizations constitute a threat of serious national Security dimensions. In Latin ‘America, these organizations, known as cartels, have become & powerful supranational political force with economic resources of a ‘magnitude fo shape developments in Central and South America, and throughout the Caribbean.8 « The most powerful -of the Latin American drug caitels are located in Colombia. The Colombian cartels constitute an international underworld so extensive, so.wealthy, and so powerful, that today ‘they operate virtually unchallenged. They have organized themselves into elaborate conglomerates for the purposes: of growing, harvesting, processing, transporting, selling and repatrieting their its from cocaine and marijuana, Merlike Pablo Escobar, Jorge ; Jaime Guillot-Lare, and Carlos Lehder, formed ocean-span- ning, thafiaike organizations capable of vory large and vory eon Pl : They have built coca processing centers'in the nearly impenotra- ble rain forests of the Amazon River Basin in Colombia—factory complexes capable, in a week's time, of converting tons of coca ‘paste flown in from Peru and Bolivia into crystalline cocaine. The finished product is then flown across the Caribbean and Central ‘America to the United States. It is estimated that there are five dollars of profit for each dollar the cartels invest in the farm-to- market process. ‘The magnitude of the profits associated with the international drug trade is staggering. The June 20, 1988 edition of Fortune Mag- ‘azine reported. that, the global drug trade may run up to. $500 bil lion year, moro than twice the value ofall US. currency in circ tion. ‘As witness after witness stressed to.the Subcommittee, the car tels are driven by financial rather than ideological motives. They are willing to do business with anyone as long as it helps further their narcoties interests. Their power threatens to undermine regional stability, and they have already demonstrated the capacity to destabilize democratic governments. These developments are deeply inimical to the national security interests of the United States. Doumsric Errsons o Invaitantonat Dava TRAFFICKING To appreciate the degree to which the international drug traf fickers have affected the lives of the American people, one needs only to analyze the statistics. Polls show that about 50% of all Americans say they have had a relative or close friend who has had a problem with illegal drugs and one out of every three says that illicit drugs can be purchased-within a mile of their home. In addition: Sixty percent of all ilegal drugs produced in the world are con- ‘sumed here in the United States; sone twenty million Americans smoke marijuana, nearly six zailion regulary use eoeaine, and half a million are addicted to heroin; —the Nationel Institute for Drug Abuse reports that cocaine re- Jated hospital emergencies have risen nearly 600 percent: be- ‘tween 1988 and 1987. Cocaine-related deaths have-risen from under 400 in 1983, to nearly. 1,400-in- 1987, the. last. year for ‘which such statistics are available; —it is estimated: that 70 percent of all violent crime in the ‘United States is drug-related; | 9 the street price for a kilo of cocaine in the United States has plummeted from $60,000 in 1980, to approximately $9,000 a kilo today. This has put cocaine within the means of the vast majority of Americans, and-shows how ineffective interdiction efforts have been; —bebween 1982 and 1985, the amount of cocaine seized coming into the United States more than doubled from 31 metric tons +0 123 metric: tons. ‘The problem has reached such crisis proportions that various federal agencies involved in the war on rugs cannot come up with a reasonable estimate as to how ‘much cocaine reaches the streets of our country today; —it is estimated that cocaine usege among the work force costs the United States $100 billion a year in lost productivity; —the American market for drugs produces annual revenues of well over $100 billion at retail prices. This is twice what U.S. consumers spend for oil each year. ‘Errzors ow ForziG' Countries It is not only the people of the United States who are victimized by the operations of the cartels. The cartels, utilizing corruption aad violence, have literally bought governments and destabilized ers. a Tn Colombia, the cocaine lords have coopted an entire nation and its government. Beginning in 1984, efforts by the Colombian government to erack down and dismantle the cartels since 1984 have led to unprecedented violence. In the past two years, 57 judges, including’ half of the Supreme Court, and two cabinet officials have been’ assassinated. A-year ago, Colombia's attorney-general: was murdered by cartel assassins. While Colombia's: has been threatened; Panama's has ‘democracy been stolen. The relationship-established in the 1970's between drug traffickers and a little-known officer in the Panamanian intelligence—Manuel Antonio Noriega—has grown as’Noriega’s power ‘aiunl bane of operations er te cara, particularly as a snoney- critic operati 3¢ cartel icularly as a money- laundering ing center. The trend toward democratization was reversed spting influence of the cartels has now been felt throughout Latin America and the Caribbean. The Subcommittee received testimony that remote islands in the Bahamas chain could be rented for use as transit sites for cocaine and marijuana destined for the United States. Despite the expenditure of significant sums of money devoted to joint interdiction efforts with the Gov. emment of-the Bahamas, the International Narcotics Control Strategy Report of March 1988 estimated that 60 percent éf the cocaine and 50-pereent of the marijuana coming into the United Staies continued to transit that country. U.S. officials attribute the problem to the continuation of drug-related corruption at all levels of government. "Be Subvamuitoetatinany of Ramon Ml Rodrigise, Part 2p. 25.10 In 1987, the Colombian cartels established a major, and secure base of operations in Haiti, turning that country into another sig. nificant, transit point for cocaine coming into the United States The cartels bought protection from the upper ranks of the Haitian military which, in turn established a distribution network in the United States. ‘This network is characterized by a high level of vio. lence associated with its operations. The cartels now pose a serious threat to Costa Rica, having established themselves in the northern war zones used by the Nicara- guar, insurgents, Costa Rica, the most. feo, stable, and iehgest standing democracy in continues to be ill-equipped to deal with this threat despite the fact that it has the toughest drug Jaws in all of Latin America. In Peru, there are reports that drug money funds the Sendero Lusminoto's efforts to topple the democratically elected government ‘that country. In Bolivia, democratically-elected governments face an almost in- surmountable task in destroying coca production and cocaine labs operating with near impunity in that nation, ‘They have corrupted local officials, including police and military, in Mexico, and there are allegations that the corruption has spread to higher-level officials. This development may be making an already serious situation worse, a5 Mexico continues to remain a major producer of opium’ poppy and cannabis and continues to be a primary source of ‘and marijuana eritering the United tes. Elements of the military in Honduras are involved in drugrelated corruption, undermining the fledgling attempts to establish a truly democrat -based, government. in that country, Be- cause of the pervasive influence-of the Honduran military on every ect of life’ in that country, theres concern that the experience in Panama could be replicated in Honduras. Im Paraguay, drug corruption within the military also lias been @ serious problem for some time. Despite the fact that Latin Ameri- ca's longeststanding dictator, General Alfredo Stroessner, was ousted recently in a military coup, U:S. drug enforcement officials are concerned that the narcoties trade through Paraguay will continue unabated. As the State Department has acknowledged, thero are “frequent allegations that Paraguayan officials.are involved in narcotics trafficking”* General Andreas Rodriguez, the master- mind of the coup, has been linked. in press reports as a major figure-in the drug trade. . . ‘Tae Nationat Secunrry Laricarions or Tae Dkuc Trane The cartels want stable governments in Latin America, but week institutions which they can control. They want a climate in which they can do business freely, without: government interference. In many couniries of Latin America and the Caribbean, they have succeeded in accémplishing this goal. Tae Naveaies Cntr 0S Bureau of Inter. serio \ Sustoay Heer, US Departs of Sat, Pure of Ise Bre In many instances, the cartels have allied themselves with organizations which are engaged in illicit movements of arms and ammunition, for whatever purpose or whatever ideology—on the right or the left. General Paul Gorman, in his testimony before the Sub- committee, described the problem very succinctly when he ob- served: “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 of subversives.” : ‘Such, alliances have beet éstablished with left-wing insurgent ups such as M-19 in Colombia, and the Sendero Luminoso in Sore ‘Noriega in Panama has been a major figure in the clandestine arms trade, selling weapons to anyone or group who would buy them, including the in El Salvador. As the Subcommittee found, even the Nicaraguan Contras fight- istas were not immune from exploitation by narcotics traffickers. followed to continae unchallenged, the operations of the cartels wil have even more serious implications for U.S. foreign policy interests thoughout the hemisphere. If there has been one area foreign policy in which the Congress and the Reagan Administra- tion found agreement during the last eight years, it was the desir ability of promoting and reinforcing the democratization process sick. as Swept Latin Ameri over the course ofthe loot Becaas This consensus was achieved despite the fractious debate over aid to the contras. : Other than the international debt issue, the operations of the drug cartels pose the most serious threat to the consolidation of democracy throughout Latin America.—Vhe basic foundation upon which democracy rests is respect for the rulle of law and the antees it provides for individual rights and liberties. The cartels respect neither law, nor the rights of individuals, nor the institutions, created to uphold the former and guarantee the latter. They have demonstrated the ruthless capability to undermine and destroy any institution or individual standing in their way. Unfortunately, the international narcotics trade, historically, has been relegated to the backwaters of U.S. foreign policy concerns. It was not until recent years, when domestic cocaine usage reached epidemic proportions and drug-related violence on the streets of the United States reached crisis levels, that serious attention has been ‘paid to this problem. However, the issue is still not given attention commensurate with the seriousness of the problem within most agencies of the federal government. To date, the US. has been unable to achieve effective coordination regarding the problem. ‘The Congress mandated the creation of a new position, the “Na- tional Director of Narvoties Policy,” informally known as the “drug czar,” in response to this concern. The drug czar will need to focus attention on ensuring that the U.S. develops a stratezy and allo- cates the resources necessary to wage effectively a war on drugs.w ‘Synopsis or THE Revort In preparing this report, the Subcommittee, has attempted to Gefind the natire of the problems assoiated wath te operntints ©¢ the cocaine cartels, There are individual chapters devoted to Co- lombia; Panama, the Bahamas, Haiti, Honduras, and Cuba and Nicaragua. The. Subcommittee had neither the time nor the re- Sources to address other major problem countries such as Mexico, Paraguay, Pera, and Bolivia, or the emerging problems in Brazil, Nevertheless, the problems and the patterne of corruption are simi. Jar in these countries as to those a by the Subcommittee. ‘A separate chapter is devoted to’ the allegations of involvement of drug traffickers with the Contra movement and their supply operations. ‘There is also a separate chapter ‘devoted to the issue’ of mioney laundering, which is the key to the effective operations of the cartels. The phenomenal profit associated with the narcotics trade is the foundation upon which the cartels’ power is based. The Sub- committee members believe that a,concerted attack onthe cartels’ money-laundering operations may be one of the most effective means to strike at their most vulnerable point. A separate chapter is devoted to an“examination of tlie conflicts between law enforcement agencies and the foreign policy and intel Tigence agencies of the US. government. For example, the DEA still maintains that it is receiving coopefation from Panama in US. drug enforcement efforte. Yet Wilhiam Von Rabb, the Commis. ‘sioner for U.S. Customs, has testified before the Committee that by 1988, US. agencies had more than enough evidence of General Noriega’s involvement in the narcotics: trade. This, according to ‘Von Rabb, rendered any cooperation Panama was giving the US in drug seizures and arrests virtually meaningless. : ‘The Report also includes appendices conceming the notehoo maintained by Lt. Col. Oliver North, and their relation to the Sub- committee investigation, and on allegations concerning interfer. ence by government officials in the initial stages of the Subcommit- tee investigation. ‘The members of the Subcommittee aro hopeful that, if nothing else, this report will stimulate significant debate and reflection both within and outside our government. The stakes are very high for us and for our friends throughout the hemisphere. This entails understanding all the dimensions of the problem and the events and circumstances that contributed to the development of the car. tels, After all, violence and corruption associated with the narcotics trade is not just a problem from Latin America and the Caribbean. Both seriously affect the quality of life in the United States as well. Ori’ Issuns an Sunsicns Requaunc Fortmer Invesnicanioy ‘This report should be considered. a first step toward a fuller understanding of the international scope of the narcoties problem. ‘Many issues arose during the course of the investigation which could not be pursued in the 100th Congress because af the time and staff limitations. There are open issues and questions which call for further study. B 1. The Subcommitte inv of money-laundering allogations involving the Bank of ‘and Commerce International should be completed. Developing an effective strategy against money laundering will require a inore complete understanding of the way drug traffickers move, hide, and invest the profits from the profits from their illicit activities. ; ° ._ The Subcommittee’s work thus far suggests that if,the banking ystem can be, closed to drag money and if assets owned: by the ug cartels can be.seized, large sedle ing. can be tore easily control fi 2, Serious questions abut the adequacy of the Neutrality Act in controlling the activites of mercenaries and soldier of fortane arose during the hearings: The Subcommittee should examina the Problems the Department of Justice has had using the Act and com. sider its revision. : 8. "The Subcommittee has received allegations that various fac- tions in the Lebanese civil war are supporting their efforts with drug money and that they have started to work with the Colombi- ‘an cartels, ‘These allegations require thorough examination. . “4: The Subcommittee has received allegations that heroin dealers ‘used the war in Afghanistan a6 cover for their operations. There are reports of guns for drugs exchanges and significant drug related corruption. The 1988 International Drug Control Strategy Report preparod by the Siaie Department, obliquely acknowledged the problem, stating “individual, resistance elements reportedly engage in opium production and trafficking as a source:of income to provide staples for populations under their control and to fund ‘weapons purchases.” * Further it has been alleged that weapons for the resistance were diverted to the international arms market. '. The March, 1989 International. Narcotics Control Strategy Report again raised concern that drug-related corruption has continued t undermine narcotics law enforcement in Mexico. The Report described. the emergence in 1988 of “an. increasing number of Colombian traffickers, within Mexico, involved primarily with facilitating the transshipment of cocaine to the United States.” * ‘The level of drug related corruption in Mexico continues to be a priority concern of the Subcommittee. While there was neither the lime nor the resources to investigate thoroughly the. situation in ico, this will be a continuing focus of the Subeommittee’s work in the future : : Other pending business includes the effort by the Foreign Rela- tions Committee to obtain access to an unexpurgated version of Oliver North’s notebooks. The notebooks contain numerous refer- gnen io the drug ‘iue bal could not be deciphered Because key sections had been deleted by North and his attorneys, On April 1989, thase notebooks were turned over by North to the Indepen: ent Counsel in connection with his trial, when North waived his Fifth Amendment; rights and choose to testify. The Subcommittee ‘will continue to seck to obtain those notebooks. A detailed discus- 2 ert Nets Cota Sater Report, US. Department of State, Bara of ter ‘ab ratlsnl Nees Gel Sati Bepet, US. Doartmun of Bat, Bari of Iaten atonal Nees Matter, Masa 1985, p 1084 slot! of the North notebook problem has been included as an appendix to.this report. Ee * ae THE BAHAMAS Iwiropucrion: , Bevause of its geography, smuggling has been part of the Baha tian economy throughout its history. The i ei ‘100'coral islands of which just 29 are inhabited. The Bahathian ar chipelago stretches 750 miles, from Cuba and Hispaniols te wat miles-off the southeast coast of Florida, ~ "0 ~ Inthe yéars after World War IL, the developinent of the Baha- taiah ‘economy focused on tourism, while-a group of British bust nessinon Imown locally asthe “Bay Street Boys? controlled moet aspects of the local economy. The Bay Street Boys represented gambling’ interests, as well.as the merchant class. In 1961, @ more Bahamian Party; the Progressive’ Libérals Party LP), led by Lynden Pindling, took power, ‘Within a: year of its 1973 independenco from Britain, Bahamian law nforeement authitities, were warning that drug’ traficking Was a “serious problem,” and by 1979, that problem was a crisis. Tw the late 1970's, both the narcotics smuggling and government corruption ‘in the Bi grew alan extraordinary rate. Initially, ‘marijuana was thé-ptincipal nafcotie smuggled through the Baha. mias, but cocaine became an i ly significant factor in ‘the early 19808) AS'of 1088, the Bahanias remained a major transit country for both‘drugs, with-50 to 60-percent of all the cocaine and tarijuana entering the’ US. transiting through Bahamian terri itritss after ‘witness appearing: before the Subcommittee testified to using ome ot another Bahamian island to drop drags for ‘transfer to fast boats or small planes.” Lins “Kelak” Garcia, a former smigelér who gave up this voca- ion volintarily to become a DEA informant, testified that Yiding a load of drugs among ton fast boats ening from the Bolte: mas he could limit the risk of interdiction to a fraction of the total Toad. Customs, he said, would be forced to choose which of the ten boats to intercept: They simply lacked the men and equipment to ‘stop all ten.* The witnesses agreed that the U.S. Custoins Service and the Coast Guard could not possibly check the thousands of Boats and planes traveling regularly between the Bahamas and the Wile the geogrihy of the Bahamas fo doi d ile the geograi thi’ is ideal for smmigeling, ain inadequate law Saleen resources assure traffickers of being -abl¢ to riove: significant ‘quantities of drugs t6 the United States Cooperation from*Bahamian officials to protect their operations ‘TPuradige Lac" The London Sunday Tomes Mogasine, Sop. 29,1986, p. 4. jinnetinal Narette Coil Stig) Tegore US Sobactsnt WS, Mase i, * subcommiseetstinony of Gur Hatses, Pt 8, Api 7, 19% 252 aad Suromnion seston ef Goren Marl, Pact, Jay S11 OPana bar, he (os ‘atta tate eh canalhen Pats era ote * Subenmmites tscknony of buts Gara Par tay 2, 987, 32, 15 from interference hes been essential. Typically, traffickers have bribed local Bahamian Customs officials and police, and have hired locals to tnload and reload drug cargoes, When their operations grew in size, the payoffs demanded from Bahamian officials grew larger, and involved higher-ranking members of government.® ‘Luis Garcia, a major smuggler of marijuana who became a DEA informant in 1983, testified: ‘ ‘Was heavily involved in sm drugs into the ‘Unitod Siates fr alos: years begining, in early 2078 that time, T a ‘an operation which amuggle from Colombia and Jamaica by way of the Bahamas with complete impunity.. That was accom- plished by paying for protection to the Bahamian author: ties from the lowest ranking officer-to the highest. politi cians and officers. It is believed that if it was not for this fact, my smuggling activities and those of many others like artia ould ray ¥ ‘cesential Corruption, he said, bey Garcia said pavotts wore exsential said, besan with airport and Customs inspectors, but continued to higher level appointed Bahamian officials. Garcia said he had never paid bribes {2 Boliamian elected ofiials* According to Garcia, a typical shipment of 6,000 to 8,000 pounds of ijuana’ cost $130-150,000 in bribes to Bahamian officials. Most af that went to police, immigration and custom. ofiials ‘Among those bribed were the’ chief of the Bahamian drug task force, whom Garcia said he had on his ero, and a former cha. man of tho PLP, the ruling party in amas. payoffs Garcia estimated were about 15 percent of the total cost of a mari. juana shipment? : In the early 1980’s, the bribes ensured the smugglers a sanctuary from: patrols. As! ria testified: ++ wif somebody’ is chasing you up there 30 miles out ot ocean and you see them coming, you can turn arotin< En head nck nto Whe alando: ead at course” you ars paying for protection. They are going to protect you - . if you pay, You won't get arrested.1® Grown or Quriciat Comnuprion wrrit Vsco AND BaNNIsTER ‘In 1972, Robert Vesvo fled the United States having been accused by law enforcement, authorities of looting $240 million from the Overseas Investors Services mutual fund. Upon leaving the US., Vesco established operations in the ‘Bahamas, developing a rela tlonship with a politcal “fixer” named Everett Bannister who was close to Prime, Minister Pindling. In time, Vesco gave Bannister “carte blanche” at the Bahamas Commonwealth Bank. Bannister and Pindling in retura provided Vesco protection from extradition. I part, a5 a result of his dual relationship with Vesco and Pin- ean SStingny, Pst 2 nm 252-258 Moraes antimony, Part 8p #8, Part 1 pl and OS Gera ast, PP 95 Shit pp Taba Te, sea pp 183d,16 ‘dling, Bannister became increasingly influential in the Bahamas, and became known to many narcotics traffickers a3 @ man who ‘could provide protection to them “from the top’? Bannister had left the Bahamas in the 1940's and lived for a number of years in New York, before returning as a consultant when the Pindling government came to power in 1967. Bannister then devoted his attention to providing assistance to clients as di- verse as Resorts Internatiorial, one of the Bahamas’ principal gambling ae gitto Ainpatanio Somoza when he me a fugitive from Nicaragua. In the latter case, Bannister reportedly: rooted $320,000 in cash from Somoza to buy him a safe haven. AC tin ‘to his son, Gorman Bannister, his father said most of the money was paid to. “the man.” Gorman understood that 1 mean ake money went to Prime Minister Pindling.1* iverett Bannister assisted drug traffickers in a number of ways, He had them removed from the official “stop” sts, making it oe: sible for traffickers to enter and leave the country without official interference, and warned them of impending drug raids.1* Usu or Nonuaw’s Cav ror Suuccune Beyond his influence with high government officials: through the involvement in the Bahamas Commonwealth Bank, a second conse, quence of Robert Vesco’s activities in the was the arrival of Colombian. cocaine traffickers..Vesco had left the Bahamas in 1972, after the bank failed and U.S.. ire to extradite him grew. But he returned in 1978, after establ lishing a relationship with the Colombian drug dealer Carlos Lehder. Lehder-and Vesco became regular companions on the islands, and Lehder decided to. use the Bahamas as his base for smt cocaine-to the United States.1+ In 1978, Lehder bought most of Norman's Cay, ene of the feuma Islands, fifty miles. from Nassau. By the ond of the year, Normans Cay was home to a group of some forty Lehder employees whe drove the other residents and itinérant visitors away from the island at gunpoint. Lehder built’a large hangar which had cocaine storage facilities inside and was using the island as'a transship. Root and distribution point for cocaine coming into the United Lehder's behavior led a number of U.S. Property owners on the island to Protest ‘the confiscation of their property to the U.S. Em- ‘bassy in Nassau. In duly 1979, one of the. Americans, Professor Richard Novak, delivered records of the. drug Sights “supported by Photographs and movies—to the then American ‘Charge d’Affaires, Andrew Antippas. After meeting with Aantippas and the DEA officers i in Nassau, Novak returned to the island small plane, accompanied by his son, to collect his belongings. Without Novak's knowledge, Lehder had learned of his visit to the Embassy and his complainis about the cocaine operation. Lehder’s associates: surrounded the plane when it returned, smashed the radios, 22 Garcia totimony, Tey Danie Bp. 84, $6. 45 Taine Inland NRG Nigaty Nowe, Apri 2 aa eae ee Ea au 2 Gubeomminice testimony of Gorman Banaser, Pat 1, May 2%, 187, p25. Ww drained most of the fcel and then forced Novak and his son to re- board and take off at night, Novak and his son survived the resulting crash.+# it the end of August 1979, under intense pressure from the US. Embassy, @ police raid on Norman’s Cay was scheduled. For rea fans never fully explained by the Bahamians, it was postponed for fifteen days. When the reid finally took place, twas apparent that during the intervening fifteen days Leder had been warned and the island had been cleaned up. As the police raid began, Lehder managed to destroy what little cocaine was left on the island and although he was arrested, he was released immediately. The major Victims of the raid was a competitor of Lehder’s, a smuggler named Ward, who was also using Norman's Cay. As a result of the raid, Ward was arrested, put on the Bahamian Government stop list and forced to move his smugzling operation to Haiti.2” Despite two more “raids” on the island, about which Lehder also received advance warning, the smuggling operation on Norman's Gay continued without interference and in fact became even more outrageous. Lehder then began a public caimpaign against “police harassment” and “U.S. imperialism.” During the 1982 celebration of Bahamian indepencence, Lehder flew his light plane over the Nassau park where the festivities were faking place and drop) leaflets saying “DEA Go Homie.” Many of ‘the leaflets had $100 bills stapled to them. These leaflets showered on the heads of the Prime Minister and U.S. Chargo d’ Affaires Antippas."* ‘The Subcommittee received. testimony from Gorman Bannister that, his father Bveret: Bannister was the person who had tipped Lehder off to the impending drug raids. As Bannister testified: Senator Kenny. Did your father warn Carlos Lehder of the police raid on Norman’s Cay? ie. Banwisran. Yeo : Senator Kenry. Do you want to desctibe that? Mr. Bawnusten. Well, a5 I recall, he just made a phone call to Carlos letting him know, well, police are going to— Senator Kenny. You heard the phone call? Mr. Banwasrer. Oh, yes, yes, yes yes . . . 1 know my father did call him one time and told him, “Listen, the police are going to raid Norman's Cay on a certain day, lean if up.” And when they went there, they didn't find . . . anything” * ‘When an opposition member of the Bahamian parliament, Norman Soloman, began to complain to Bahamian and US. au thorities about the situation involving Lehder’s use: of Norman's Cay for narooties trafficking, his house and car were blown up. Ac- cording to Gorman Bannister, Lehder boasted to him and to his father that he was behind the bombing because he didn't ike Solo- man depicting Lehder’s Colombian employees in the drug trade as 15 Rapes ask” Me London Sunday Times Magan Sapam 21985,» 3. Se 3 annie testimony, p18 “animals.” Bannister testified that his father viewed Lehder’s decision to bomb Soloman as appropriate.*° acrittatt Bonnister ras indisted fa the Southern Distriet of Flor- in 1, 1989, on ies following testimony before the Grand Jury by his son Gorman. for Resronse sy Unrrep Staves 70 Lenpen PRoniem A Subcommittee staff review of the portinent cable traffic from the Embassy during the relevant, period shows that the U.S. Em- bassy contiqueusly protested to the Bahamian, government about the Norman’s Cay problem and routinely cabled Washington about the scope of the problem in the early 1980's, ‘These cables led to i 1982 meeting between Vice President Bush, Admiral Daniel Murphy and Bahamian Prime Minister Pindling, ‘at which the Norman’s Cay problem was raised. The Vice Prest- dent chastised the Prime Minister for what was taking place. During the meeting, Prime Minister Pindling was shown a comput. er printout of C5A surveillance of Norman's Cay and was told that the island resembled O'Hare Airport bocause of ts activity. Despite this confrontation, there was no follow-up by the United States. Instead, with the appointment of a new Ambassador, ‘United States-Bahamian relations focused on base rights negotia. tions, and the drug issue was relegated to a much lower priority. ‘The new Ambassador, Lev Dobriansky, stated publicly that in his view the most important issue in United States-Bahamian relations ‘was the negotiation of base rights for the United States.#? Law enforcement agencies and ‘in south. Florida noted the policy shift. "These officials were attempting ta obtain State Department cooperation for sting operations aimed at Baha- mian officials, and for their efforts to extradite traffickers from the Bahamas. These actions were met with indifference and in some ‘cases hostility from the Ambassador.?¢ On September 5, 1983, NBC “Nightly News” exposed the Nor- man’s Cay scandal ‘and directly accused the Bahamian government, of complicity in allowing Lehder's operations to continue. The NBC broadcast and the resulting outery in the Bahamas led to the estab- lishment of a Royal Commission of Inquiry to probe drug traffick. ing and drug-related corruption in the Bahamas. The Inquiry report led to the resignation of two cabinet officials and the pros. ecution, but later-dcquittal, of some’ police officials. The operation on Norman's Cay came to an end and Lehder returned to Colom- bia. None of these events changed the role of the Bahamas as a imajor transit point for cocaine traffickers or diminished the corruption within the Bahamian government. ‘Subcommittee hearings on the issue and a debate on decertifica- tion of the Bahamas for failure fully to cooperate with the United States on drug enforcement issues genorated renewed concern, and narcotics again became a major priority of the Embassy. i 3 ubiditee testimony of Admiral Daniel Murphy, July 14,2068, Part 4, p. 250-20. 7 se tee fet, Jy 14, 2988, Par 4p. So ilbsmeo tie of Belrd Gree uly 12, 185, Past po 16-10 19 ‘Exrent or BanAMIAN Comnurtion Topay ‘The State Department’s annual report on international nsireolies control details the degree to which corruption remains today an ec sential clement of the Bahamas’ stalus as a major drug transit country. fre "According to the 1988 report, the Bahamas still is experiencing “eyetematis, corruption, Which continues to make the Bahamas at- ‘ : ‘notes that investigations into official corraption appear to be limited to lowdevel enforoe- ment officers and fail to deal at all with higher-level corruption. Even when corruption is found, suspected law enforcement or mili tary personnel are not nc charged or tried in court for thelr offenses. Instead, they are merely forced to retire.** : Other evidenes of the continuing problem with official corruption in the Bahamas is the renomination of George Smith and Kendall Nottage for parliamentary seats by the ‘Liberal Party. Both won their seats despite the fact that they were identified in tho 1984 Commission of Inquiry Roport as being involved im narcot- icerelated corruption. Nottage was indicted March 29, 1989 by a Boston federal grand jury on nareoties money laundering charges. ‘Although the” Bahamian government passed comprehensive drug law in January 1987, which includes a provision for the *ret- reactive confiseation of narcotics derived. assets,” no arrests oF rosccutions undor the new act took lace in the year following its enactment.2” In 1988, only one person, 2 jan policeman, was convicted under this provision.*® ‘The March 1089 report stated that nasotin relatad eoeruption continten tp. bes problem, making the country afzractive jckers.” = Similarly, extradlioa of drag trafickers remains a sorious prob- Jem. The United States has for more than three years sought extradition of Nigel Bowe, a Bahamian lawyer with strong tes to the PLP and the Bahamian government. To date, the Bahamians continue to stall his extradition °° ° ‘The Bahamian response to the U.S. on the Bowe extradition issue has been inadequate at best. Bahamian officials argue that Bowe is a rich man and using the best legal talent in the country to delay extradition. What that explanation fails to address is the question of why the Bahamions themselves have not investigated Bowes activi. US, law enfireement authontics believe Howe hhas played a key role in organizing smuggling throughout the Car- Bee Rate which aloud Ee of ine fnvarant tthe Baka. tian authorities if they are indeed concerned with cooperating ‘with the US. in the war on drugs. Nevertheless, the Unltd Sie bas continued to cry the Ba hhamas as providing “Tull cooperation” in ‘war on drugs. The United States has done soon the ground that the Bahamas ~"Wleterational Nesoics Conea Bopert 2 apartment of Sun earch 1958p.20 has taken adequate steps on its own to control drug: production, trafficking and money laundering. “Assistant Secretary of State for Narcotics Matters Barbare Ann ‘Wroblesid testified that the “baseline issue” in determining wheth- cr to certify a country was whether there is “corruption to such an extent that it has gotten in the way of cooperation.” #1 The record developed by the Subcomnittce, as well as the, State Department's own International Nareotics Control Strategy Report, document, that corruption in the Bahamas continues to be the ‘major obstacle to cooperation. " Banamas Suexs To INFLUENCE U.S. Poicystixses In 1985, the increased public attention to the role of the Baha- mas as a base for drug smuggling led that government to seek the advice of a US. public relations firm. The firm, Black, Manafort, and Stone, submitted a memorandum to the Bahamian officials suggesting that it could sell the United States government on the importance of the Bahamas to USS. security. In that memorandum, Black, Manafort suggested that public attention be focused on the demanid side of the drug issue, thus diverting attention from the narcoties-related: problems on’ the islands. The “Black-Manafort principal assigned to the matter; Matthew Freedman, was a former senior State Department official who had handled narcotics issues. #2 Shortly after the 1984 U.S. election, Blick-Manafort advised the Bahamian’ government that “perception by ‘Official’: Washington will frequently drive the realities which will affect . . . policy decisions. In this regard; the Government of the Bahamas is operating in a négatively charged atmosphere.” ** < ” ‘According to Black-Manafort, the Department of State and the Department of Defense wished to maintain a “solid relationship” with the Pindling Administration, but the DEA and the Depart- ment of the Treasury were “active critics.” According to the memorandum, political critics of the Pindling government had been “sowing the seeds that the Government of the Bakiamas is a nation for sale, inviting drag czars to use the banking system, that government officials are participating in the drug trafficking, that the Pindling Administration is about to collapse and much more.” §* Black-Manafort advised the Bahamian government that it needed to lobby both the Executive and Con, ‘branches of the United States government, beginning with the National Securi- iy Council to mobilize political support for the Bahamas and to focus the Departments of Defense and State so as to “affect Treas- tury and Justice policy.” The memo went on to suggest that the personal relationships between then Secretary of Defense Weinberger ahd then Attorney General Meese could be tised to redefine the priorities of the U.S. in its dealings with the Bahamas.*® Black-Mana- 21 fort was to charge the Bahamas $800,000 per year for representing them on these matters, and the firm was ultimately retained by the Bahamian government.°© ne addition, Stormer coordinator of the South Florida Drug Task iral Daniel Murphy, who participated in the previously jnentioned 1982. mesting with Prime Minister Pindling, testified that he solicited the aS be a client, for his consulting firm, Gray and He was unsuc " F “We role of the US, consultants raises troubling questions about ‘conflict of interest. Narcotics issues are indeed “national security issues.” The Subcommittee believes it is not in the interest of the United States to have former government officials, whether from ‘the Congress or the Executive Branch, who held policy positions dealing with narcotics law enforcement, to use the ‘have obtained to work for a foreign government whose officials are implicated, either-directly, or indirectly, in ‘the drug trade. Bawamian “CooPErarion” Shortly after the Bahamian government retained U.S. public relations consultants, it suddenly ‘began cooperating on some drug issues on the advice of its consultants. For instance, the government allowed the installation of an acrostat radar, set up joint air fnd navel operations and allowed U.S. authorities to enter Bahs- Inian territory in hot pursuit of drug traffickers. Yet the coopera. fion remained far from complete. For example, the government continued to allow foreign nationals arrested for drug smuggling Teave the country after posting bal and continuod to make i Gi cult for U.S. authorities to participate in the destruction of seized Bahamian willingness to cooperate with initerdiction efforts has created a proBahamian constituency’ in interdiction-related ‘agencies such as the Customs Service. But the increased level. of interdiction. cooperation has neither cut the amount of cocaine coming into the United States from the Bahamas, nor has it led to fhe destruction of the major smugeling organizations. Indeed, as Deputy Assistant Secretary of State for Inter-U.S. Affairs Richard Holwill noted, “. .. notwithstanding ,the cooperation, there has been ani increase ‘in trafficking.” *® The Assistant Secretary of State for International Narcotics Matters and the Administrator of ‘the DEA acknowledged that the Bahamas remains. significant transshipment point.*° Foree, Concrustons « : ‘The case of. the Bahamas illustrates many ofthe failings of ‘United States foreign policy as it relates to narcotics: {| Policy was made at the Embassy level with little apparent interagency coordination. When ambassadors changed, and U.S. antidrag efforts in'connection with the Bahamas diminished, the rae 3 ign veo! Bagstregns maintained by Seerary of ho Senate 1965-955 Seay. 22 {Bafa taagany of ocho ol, Jay 11,186, Par2 dlecieased. attention to the problein went largely unnoticed in 2. There was not any coordinated follow-up to stron initiatives. The Vite President’s meeting with Prime Minister Pindling was followed by a four-year hiatus before significant pressure was ox erted on thé Bahariilan Government relative to the drug issue 8. The Administration did not regaid the in the Bakia- imag as an important post because of the country’s locaton, sizo and political system. Mr. George Antipas remained as the Charge for more’ than two years before a new Ambassador was appointed, His replacement had little experiens in Caribbean affairs and did not exhibit any feeling for the importance of the drug issue. ‘The current Ambassador has demonstrated an ling of the drug issue, end has elevated this issue to the top of the US.Baha. mian bilateral agenda. 4, There was little oF no direct cootdination between the US. At torneys in Florida and the Embassy in Nassau. The lack of coor: nation led law enforcement officials to believe that there was little Point in pursuing cases against Bahamian cltizens or government officials because they would get little‘support from the State De. partment on extradition or operational matters. ‘Today, some of these’ factors have changed. The U.S. government point for illegal drugs coming into the United States. There are some areas,such as in the arrest and deportation of drug traffickers found smuggling through preclearance procedures, in which the Bahamian government is now cooperating with the U.S. ‘Yet the Bahamas continues to be the major transit point for cocaine and marijuana coming into the US. Even though laws‘have been enactéd to allow seizure of drug-related assets, no’ stich sei- zares have taken place. Few; if any, drug traffickers arrested in the Bahamas are convicted and jailed. The result: sts to “many ‘that the Goverziment of the Bahamas is not sincere; bar engaged in ‘a reithet cynical exercise to placate the United States, For’this reasoi, one ‘of the. inost iniporiant issties in United States-Bahamis drug cooperation js extradition, eapecially of persons indicted in the United States who have alleged ties to Baha- ‘mian govérnment officials. In the past, the U.S. ‘Customs Service has expressed somtis concern over the granting of pre-clearanee privileges to other countries. Customs’ officials have argued that the United States stands to lose control over the dispdsition of individuals charged with ‘crimes ‘and artested in-a foreign-country with which we have such agreements, particularly if there-have been historical problems associated with extradition. ‘has ‘expressed the concern that some individuals who otherwise would have been arrested -upon Teaching the U.S.:may escape punishment following an arrest in such a country. ‘The State Department has argued, however, that pre-clearance ¢an serve the useful. purpose of alerting U.S, law enforcement alr ‘thorities that an’ individual charged with crimes will ‘be entering the U.S. on a specific date, time and place. This advance intelli- B gence can be used to ensure that arrests are made once the individ- lual reaches his or her destination in the United States. ‘The pre‘clearance agreement with the United States is very im- tant to the Bahamian tourist industry. The Subsommitioe bo- eves that a thorough review needs to be undertaken regard this agreement, vo determine whether on the whole if has seauond the flow of narcotics to the United States from thé Bahamas, or ‘has allowed narcotics traffickers to escape punishment. If the bene. fits do not outweigh the costs, the U.S. should announce our intent to terminate this agreement within one year unless substantial progress is made in resolving these problems. In addition, the Sub- committee believes the President should retain, as an optional sanction, the ability to terminate any nation that has customs preclearance if it is determined the nation does not fully cooperate with the U.S. in the war on drugs. Appenpnc DeNtat or Requssr ror DECLASSIFICATION In this Chapter, there are five references to news media reports on the Bahamas which are used to document the role of the Baha- mas in the narcotics trade. On Decerber 1, 1988, Senator Clai- ‘rote iho Bopactinenl of Stats ces eae eet eS wrote the rent of State requesting ication USS. Government documents witch sofroborate these ners ae counts. On December 27, 1988, Chairman Pell was notified in writing by the Department of State that the declassification request had been denied. The one document which the State Department did not obejct to dectassifyi was a September 5, 1983, transcript found in their files of an. BC Ni shtly News program entitled “ Navy and the Bahamas.” The Subcommittee believes ‘strongly that disclosure ‘of all 11 documents is in the-public interest to facilitate iblic understanding of official responses to the war on drugs. The Blate Departament response of December 21, 1988, and te eaten ber 5, 1983, NBC transcript are included as appendixes at the end of this section. Fae BE To oe en, Chane Fee Pe on en Reaons . Batreen, paste on Be ese oie Cecmeee spi is ees ae ual sepia Gung 1 suing ete rue oe Dpsimen of Dosen, ares ia Dagens soma ers apd sees ranarenty te Dpecent won reser ec ae a ers eden toute a pee thy alae sr suena No 71 and 1, The ee ara rat mee En ot eens Noe 710 and The Cl arias mete pl gee phere aii (6) are noted in the margin. We believe that despite the passage of time, the presi ie habe se att wae a he pe of he rene ‘phalanges Ee sive Se en ee eure Benes egies re remot ome. Sane Sertis Nou 25, 6 and 6 mn be rindi lL Deusen Noe 5 Gem NE 2 G5 fan Smit bd nf Dosa a2 sey ae rae ete alr the dlr whch Sa in ral relat ie Cove24 ‘ules confidential US assessmont and recommendations. In addtion, document ols whol and document: Noe'$ and Som ee compel of Gals, tive materi which must be withheld under Soston G50 ofthe Rrestoms of ate, mation Act (tle 5 "USC Section 802) es comprising intzcegency oF ini agerey cofmmunicains exempt trom dslosuo under the Gelberaive proce! aaa ‘We Peliove that the Department of Justive has dignicant equtes in to doc ments, Nos 9 and 12, which we baisye conta sonaitive asaya the islonce of Henle Stain Ops govansnen eter eae A sve hee eee ents contin fees conti in condone ec os confidential US goversiment accesament Therefore the: Departinent of Teste 2 ole Roseman corpse ee ml eaten cto teehee auth aa fete mae wih our it fer, Frodarck Smith, Se of our Barone of nesinceien Soest BR Sink jeant a 4, Bamaso Aesitt Sata eS rs nsonzee: Documenta Nes 1 though 32 a pane wevingniof Data Att he Baty Young Bares eC ree WEY Bae Sr Bak ‘Navy and Hahamse. mate ‘Tou Buowsw. Robert Vest is Advorican's miest notorious fugitive, For years law gplorcoment officials have been trying to nal iim om « variety of changed, mest of them related to the disappearance of tilions of dalars from company tat Wess, “Toneht is this Spcil Sdgment, Brian Ross describes hk Vesco continues to tse Pnertar ees aia Mimmy, now in the Bahames, ‘where ths Veecs soumecsne > ‘I “Suan Roos For more than four years now, this beaut, seldom vied i fhe Baharoas just S00 mails from the Florida coast hasbeen the base Wo oa of Digest deg tugging Gooaten nthe wor "pe island in'aloa Norman's Cay, and her he drm. eared angie tenga fon of cosine oad. pmerst ay oa te Fr Be ee ft, pat wen st hen tofu May. Mc. Vesco was involved very heavily in the cocaine tealto he was & major agin eh spr aye ig el hr nr er paca paes een Be oo ie Se mete te ee se pe pe a a ee a oo Sioa eit mmr ere BY ta SMES ArGeTSP "Ds ty tao ear earn ae tor eee Gs Aner he en pose the hon is Colombian conpcetion, his whos ony Ra, ace a bask ee ie oii net Sy pet ene Base cr Aine hubris ay Veco fut 09 wl protected in tho Behames ESA cat perl deat ean TEE iees Ae ieee aes” Sega ee tae Se meee ae ea 25 Prime Minister Lypden Pindling declined to be interviewed by NBC News about allegations of corruption i his goverment. In public, as at this rally last wees, some of the very Bahamian officials suspected Involved in drug corruption with Vesco and others, speak boldly egsinst rugs. Rn Mav. Teuy crime and drugs is frustrating our postive image in the coun , This is Kendal Nottage a member ofthe Bahamian parliament and a cab al ings, NBG Nowy has leened tat this une the FB was ach ‘Baking plang to ty fo srrestod Nottage as part of big Federal effort to a eibess sepsis e ABSEAM Yo got Note «iat yeh pat Babe fa waters £0 608, ‘bribe cameras rolling. But the plan ‘vas blockea at Me American embassy in Naseat ‘Anbaseedor Lay E: Dormant Fre copped i. Hoss Une Slats Anomndcs or Bobristaky says an of the rewsons be slopes tho BI investigation wos that i michtupost delca‘e negations wih the waians over o US Nary submarine testing bose in the Bahamas ‘anor, Done, Ths cul be ep eberrg™ i Gosling desiabtiing: When you look athe total potare ‘heen gar relations withthe Bahamas is no solely In dhe Crug ares there are many Gir things whiee, over te long pull wil be more important than fe dug oss Federal anthontis say 10 parcont ofthe coos and marijuana Cotiing into fai anti cong thug te abana. "Fourra May, South Florca & ct 7d ofall of it yet, not as long as we have the ‘Bahomaa over thers, Rose. Police in Florida aro making, dozens of drug agrests every day but, the supply of cocaine hasn't gone down, its gone up. And iva gone up because of the igne Rotor ose, ci to protected by Scbasine wbicel sed oisemed BS tive Robert Veee oman é ‘Berean. lost ior cooerod with tho Novy oes in the Babu tha rug bases in : ‘Bhan Feas, NSC News, the Babaraas. COLOMBIA Inrgopucrion, Colombia is the oldest democracy in Latin America and, until re- gently, has enjoyed one of the continent's most buoyant economies, However, as previously noted, Colombia's economic and political future & being threatonod by narcotics trafficking organizations known as cartel General Gorman aptly characterized the state of affairs in Co- Jombia today when in testimony before the Subcommittee he stated, “the narcotrafficking organizations . . . through bribery, ex: tortion, and intimidation. became beliey informed and more tically powerful . . . than the government.” > P While tere are dozens of drug trafficking organizations in Co- lombia, two cartels, the Medellin and the Cali, dominate the i narootios trade. They have transformed the cultivation, processiny and distribution of cocaine from a small business into @ powerful, ‘vertically integrated, multinational industry. ‘Their political and economic influence % felt not only in Colombia, but throughout Latin America, What they cannot buy, they take, often using vio- Jetit means to achieve their goals. ‘The Subcommittee recdived testimony from several witnesses who stated that the cartels are not driven by any ideology, but view themselves as nothing more than businessmen. They favor po- Subcom testimony of General Paut Gorman, Batt 2 Feb 8188p. $1,26 litical stability, but in the context of a government over which they exercise control. In Colombia, democracy still exists, but many of its institutions have beon reduced to near impotency, The Colombi- an judicial system, for instance, has been effectively neutralized as the government has proven incapable of arresting or prosecutin the major extraditing them to the Unit Jn many respects, Colombia isthe country that holds key to tho future of cocaine trafficking in this hemisphere. As Colombian nar- otics trafficking has increased, and the violence and corruption in Bat country have worsened, here, have been diferences in the . governinent as appropriat to pursue.’ These differences have undermined antinarcotics policy in that countey. ‘Testifying before the Subcommittee, General Faul Gorman, the former hi of the ‘U.S. Southern Command, detailed shortcomi in US. narcotics policy as it related: to Colombia. Gorman made four points: First, we have been promising the Colombians material help slave 198 We have simply not achieved, Wether that help is radars or modern helicopters or actionable intelligence, the rhetoric of the United States has consistent- Y goeond, we have eachod rim measures, ,_we have x short-term mé in effect, apply Band-Aids to what: is a massive social trauma. We have not cought to devise with tho Colombians a long- {erm comprehensive st for dealing with the arco. one which wo :w upon the respective of both countries. sei oe ‘Third, we have failed to, bring American technology to bear, either for short-term iactical advantage or for longer ‘range developments which might promise a decisive strate- eee our the O has fled to engage four, the U.S. has failed to tho capabilities of the Colombian Armed Forces. " Gorman characterized U.S. efforts in dealing with the Colombi- an on this problem as having been “half-hearted.” © Onents or Nancomics TRAFFICEING IN COLOMBIA During this decade Colombia has gained the infamous reputation as the preeminent, in Latin America associated with cocaine trafficking. ,, however, Colombia became a center for global drug trafficking as a result of the trade in marijuana ‘The cultivation of marijuana was introduced to Colombia by Pan- amanian growers around the turn of the century. However, it was not grown in any significant quantities until demand in the United mushroomed during the 1960's. By the middle of the 1970's Colombia had as a major marijuana suy to, the United States and by the end of the decade had actually supplant- ed Mexico as the chief source for marijuana worldwide.* ' Subcomlite testimony of General Past Gorman, Put 2, Fob 8,188, pp. $9-84 ee 1 Bogie, Frey Afr, Vol. 61, No. 8. Ca With the marijuana trade came two important developments: the Colombian narcotics trade became a multimillion dollar indy and a criminal narcotics infrastructure was established in both Co- lombia and the United States. ‘The Subcommittee received testimony from convicted marijuana smuggler Leigh Ritch that clearly il- Justrated both of these developments.* Leigh Ritch began his criminal career in 1969 by unloading bales of marijuana from Colombian drug boats that docked in west Flori- da, He was nincteen years old and making between “five and ten ‘thousand dollars, only”"—a night. By the late 1970's Ritch employed dozens of people’ and was ‘his own sailboat to smuggle mari- Juana valued at some $40 million a shipment. At the time he was ‘arrested in 1986, Ritch had a barge ready to leave Colombia that was loaded with’ more than one million pounds of marijuana and valued at betwoon "$300 and $400 million.” * Ritch had profited enormously from the marijuana trade, but his profits never ap- proached made by major Colombian criminals in the cocaine ing ‘Coca, the base for cocaine, traditionally was grown and used by Colombian natives for generations, but was not produced for export until the late 1960's when a small Cuban-American criminal organization in Miami began to smuggle the drug into the United States, The cocaine was trans] from Colombia to Florida by individuals known as “mules” who’carried a few kilograms at a tne with ther personal belongings on commercial airlines. ‘This small scale smuggling of cocaine into the United States became a major enterprise in the 1970's when a group of Colombi- fans inchuding; Pablo Escobar, Jonge Luis Octoa Vasquez and Carlos Lehder, seized control of the existing cocaine distribution networks during a period of violent confrontation known as the “Cocaine Wars.” ? The Colombians organized their own distribution system and began to ship cocaine in bulk to the United States. By the late 1970's they had established criminal organizations in both Colom- bia and the United States. However, it was not until 1982, when faced with a threat from Colombia's most powerful terrorist organization, the M-19, that the various Colombian cocaine organizations banded together to from the world’s most powerful drug trafficking organization, the Medellin Cartel. Omens oF THe CaRTErS In 1080, the M-19, which began as a fiercely Marxist revolution- ‘and terrorist movement inside Colombia, undertook a series of Eanappings of wealthy individuals who "were them held for ransom. ‘Two years later M-19 kidnapped a member of the Ochoa family, one of the leading criminal families in Colombia.* In response to the kidnapping, Jorge Ochoa, the family leader, called a meeting of the drug kingpins at his restaurant on the out- skirts of Medellin, Colombia. Each drug kingpin who attended the ‘Rah is srving « 20 you santanoo without perle Ine Federal prison for drweing a cimi- sal entrprin * Eaob Bch tetinany, Pb 208,» 68. 1 Keren Ass, Val tt, No 26. 1ST tecmonyof Ramon Milian Rodrigue, Pat 2, Feb 11, 998 p. 248,28 meeting reportedly contributed $7 million to create.an organization called “Death to Kidnappers” or MAS, which. was dedicated to ending left-wing kidnappings and extortion. As described by Milian Rodriguez, the cartel wanted to “get rid of a threat both politically ‘and economically. You must remember M-19 is Marxist Leninist in ‘dpology andthe cartel i a capitalist enterprise” * newly formed drug trafficking organization, which came to be called the Medellin Cartel, raised a 2,000 man army -and equipped it with automatic wespons. This army subsequently en ‘the revolutionaries ina bloody way, and won a decisive vito. ty.!° Milian Rodriguez. testified that “not only were the M-19 killed brutally, but the brutality was made public . . . the victims Were hung up from trees, they ‘were disembowled, with sims en them to discourage the population from cooperating with them.” 1 When the violence subsided, the victorious cartel forged an alliance with the defeated remnants of the M-19. As a result, the M- 19 had become an enforcement mechanism for the Cartel, using its soldiers to protect narcotics shipments and intimidate the Colombi- an government, In return for providing these services, the M-19 ro- elves money and weapons from the Cartel,'2 ‘The war with M-19 also resulted in a loose alliance of the key leaders of the drug trade in Colombia, After the war, when problems arose for the drug industry, the individual traffickers met to work out solutions. For example, one witness described a meeting of the trafficking organizations to discuss the problem of extradr Be feed eins ocho rf drug trade 0ssit aI ing officials in the US. Government ‘a negate the issue.*® ion among the trafficking ions has even. been extended tore ahosig associated with deog shipments sous te ake [ited States. ‘As the International Narcotics, Control: Strategy port says, ‘shipments appear ing to several organizations. ‘This avoids sending half empty planes or bosts, and, more impor- tantly, immunizes individuals in the event of seizure. It is reported- Iy now possible to insure a load age sleet cooperation among the Colombian. organizations increased, so did the production of cocaine. For example, in Florida, in the spring of 1982, Customs officials at Miami International Air port discovered 3,906 pounds of cocaine—more than four times the previous record seizure. That seizure, despite its size, did not drive up the price of cocaine on the streets, sugzesting that the flow had not been interrupted in any meaningful way. Orcanwarion AND WEALTH ‘The cartels became in esserice, vertically integrated businesses, controlling anywhere from 60% to 80% of all the cocaine coming into the United States. The Medellin Cartel, in particular, perfect: ae PAu va ho aie 2s So Ecra ers Taeeg D Semen ce ae Gtr aw Pe, q:imeratinal Nevis Canta Strangy Rapart US Department of Stato, March 158, p 29 ed the cocaine smuggling business into a high-tech trade based on specialization, cooperation and mass-production. Escobar wes responsible for the production side of the business, the Ochoas han- died processing and transportation, and Lehder, prior to his arrest, handled the distribution end. General Gorman characterized the organizations as “mafialike rings capable of very large, very complex undertakings demanding significant diceipline and very tight management.” © ‘One witness described how the Cartel leaders are served by an array of “underbosses” who handle specific contract assignments.2¢ ‘Many of, the underbosses made arrangements with North Ameri- ‘can “transportation organizations” which flew Cartel drugs io the USS. where the coceine was then turned over to the Colombian distribution network in this country. Altogether, law enforcement gourogs estimate thet the organizations have more than 6,000 men erst? ‘This complex and elaborate organization earns an estimated $8 billion for the cartels each year. Forbes Magazine has listed Ochoa and Escobar as among the richest men in the world.2# ‘The edrtels have invested these profits in vast real estate hold- ings in both Colombia and the United States. The Miami Herald described Hacienda Veracruz, the Ochoa family ranch in northwest Colombia, as “so huge it encompasses several towns inside its bor- ders between Barranquilla and Cartagene."*® In testimony before the subcommittee, a Miami lawyer who met cartel members in Colombia described an enormous ranch with ‘any thousand head of cat, a palatial farm house and swimming ‘Ramon Milian Rodriguez, who claimed to have been to the homes and ranches of all the major cartel members, described the ranches as “effectively pretty self-sufficient entities .”. . that generate their own électricity, . . . the only thing they need is a source of fuel. Everything else is either grown or there are substantial supplies.” Rodriguez testified that he had been tasked with buying animals for a private zo0 on one-of the ranches. He said, “I've imported rhi- noceros and other weird animals that you wouldn't boliove.” + ‘Rather than being perceived as outlaws and outsiders in Colom- bian society, the drug lords increasingly are acknowledged as the single most powerful economic entity in Colombia. They own news- papers and broadcasting companies, and one-third of their income is invested in Colombian industry, real estate, and agriculture. There is’ cartel involvement in over onchalf of the Colombian soceer league. Cartel leaders have passed out money to poor farm- era and supported Colombian charities. Where they have not been able to buy political influence, the cartels have resorted to violence. 1 GUE eapace o ton, Dogan 4957, pp, 616. 1 SXGparealsCoonine Gousection’ The Miami Heel, November 29, 1987, p. 284 1h phe Mopssnn, ay 2 po 1s ERE Cresine Cosetn,” Pe Mand Herts, Deember 2,187». 0A. Se cedtocay of lan tern, id po 2. 2 [flan Radrguoe Pot pe30 ‘Tae Cartat’s War Acarver nie CoLoMBIAN GOVERNMENT ‘In 1988, the cartels establishéd large scale processing facilities in the Amazon région of Colombia at a location vailed Tranguilandia, ‘The facilities, which were discovered and dismantled by the Colom: dian authorities in early 1984, were, producing between two and Bhree tons of cocaine a week. Astonishingly, the destruction of the ‘Tranquilandia labs did little to disrupt the cocaine trade. ‘The 1984 Tranquilandia raid was a direct Colombian government challenge to the cartels’ In the months that followed the raid, the government tried to shut down the Cartels with an ogres. sive and seizure campaign, Instead of retrenching, the cartels launched an open war against the Colombian government. The cartels-employed the tactics they had used in their war against the M-19; a highly visible campai of violence was directed at prominent Colombian officials. and erit- ics. For example, on April 30, 1984, 50 days after the Tranguilandia raid, assassins killed Colombian Justice Minister Rodriguez Lara Bonilla in Bogota. Drug pilot Floyd Carlton deseribed in detail how {35 Qehoe brothers contracted for Bonilla’ death: Y.-- before thoy killed this Minister of Justice in Colombia, there was, like, a kin nd everyone tated about the fact atthe sancti te everyone at at the son-ofbit SrRRr yeti hh ey iene trios @ Minister ice is not the o lombian to have been brutally lilled by’ the cartels In 1988" Colonel dainty eeepc Gomez, head of the Colombian National Police's AntiNarcoties Command and the man responsible for the seizure of some 21 metric tons of cocaine during a three year period, was assassinated. He was shot twenty-eight times in front of his wife and children. ‘On:December 17, 1986 Guillermo Canu Isaaca, the crusading anti narcotics editor of the Bogota daily newspaper, Hl Espertador, was assassinated on his way home from work. killings were ‘carried out by hired tionsfrom the Medellin slums. Yet, none of the leading cartel members have ever been directly implicated in any of the murders, and as one US. Drug Enforcement Administration otcial bganed: “Pheri a cop. arrest them; there isn’t a ju i em; there isn't a jeil that will hold them” #8 ao Apquacy or Lecat anp Law Exvorcesent Measures ‘The power the cartels have exhibited and their ability to’operate safely in Colombia raises the question of whether the Colombian government has the capacity to challenge soriously the drug trade. On the one hand, the casualties among Colombian law enforcement als, judges and government officials eloquently about the sincerity of the Colombian effort. John Lawn told the Commit. tee that he felt the Colombian police and military authorities had been “active in the interdiction of cocaine and marijuana, as well as cocaine essential chemical shipments.” 2+ BOILER E25 tm REBAR gyro tae ce cnt et 3h At the seme time, the tact thet the cocaine trade has grown steadily in size and scope, and that the cocaine organizations continue to operate with impunity, suggest that the campaign of corruption and violence has taken their toll on the Colombian. govern ment ‘The U.S. Department of State in its 1988 International Nareoties Control Strategy report concluded that Colombia “does not yet have a coordinated strategy to combat the traffickers, and the judiciary, in particular, is virtually paralyzed.” ** That paralysis is ex- emplified by the problems associated with extradition of Colombian narcotics traffickers to the United States. ‘What the members of the cartels fear most is extradition to the United States. When the extradition treaty between the United States and Colombia entered into force in 1982, the cartels reacted swiftly. First, they launched a public campaign to have its constitu- tionality tested in the courts. Second, a terrorist unit broke into the Colombian Supreme Court building and murdered eleven sit- ting judges. The attack, which occurred on November 6, 1985 at the Palace of Justice in Bogota, resulted in more than 100 fatalities. ‘Although the attack was attributed to M-19, it was clearly related to narcotics trafficking since those involved in the assault burned all of the files relating to periding extradition cases. ‘The United States has nevertheless twice tried to extradite Jorge Ochoa from Colombia to the United States. Ochoa was indicted for narcotics smuggling in 1984. US. Drug Enforcement Administra. tion officials estimste that Ochoa has moved nearly sixty tons of cocaine into the U.S, between 1982 and 1987. The first, extradition effort was undertaken when Ochoa was arrested in Spain in 1985 on drug trafficking charges. The United States requested extradition from Spain, but Ochoa’s lawyers persuaded the Colombian government to file for his extradition to his, home country on the same charges. The Spanish judge decided to send Ochoa to Colombia where a judge released him on short order. However, the extradition request was not pursued very aggros. sively by the U.S. government. Assistant U.S. Attomey Ri Gregori complained shout the Depariment of Site's stinude re ling tho exttradition of Ochoa from Spain. He described his meeting with U.S. embassy officials in Madrid, noting that, “I dealt with a very nice secretary, but she was the’ most, knowledgeable srson in the embassy as fo what was going on with the extradition... . here is the most significant dope dealer in history, and they've. got this nice little old secretary who is the only one who ‘kngwyg evorything there i to know about this guy gtting extrait, Gregorie went on to say that when Attorney General Meese Became involved in the case he (the Attorney General) did not re- ‘quest a briefing by the federal prosecutors directly involved in the case. In addition, Meese did not debrief federal tors handling the case on his discussions with Spanish government offi- SRG SEES Sa cnstn niet on ts2 Tn November 1987, Ochoa was arrested by the Colombia poli aud held in eustody in Colombia on a charge of iopally repeats bulls into the country. The U.S. then sought to have Ochos extre ited without relying on the extradition treaty botveen the two saying that he had served enough time in jail on the charges for the Colombian government began an investigation of the 4 sponsible for Ochoa’s release. Hi 2 passe Serica lowever, the damage was doa ara] m the U.S. side, the second attempt to extradite Ochoa from lombia,was bandied at the desk and rouiondl alfocs tenet ok Wee State Dey t for the first several’ weeks. The only indication of igh level interest in the matter was a lotier from Ateneo {General Moose to tho Colombians. 1 was ony after Ocho was 22 leased from pri President Reagan directly LORE ets "aided the issue ,_ The only major trafficker to have been oxtradited from Cole ig Catios Labisn who was xpelcd Sevag sea ee Colombia vicied on federal racketeering charges in August of 1988 ands oon, rently serving a life sentence in federal prison: The State Desen, ment attributed the Lehder extradition to the fact thet all he roceédings in the ease were completed before the Colombinn Ga. prome Court ruled the ‘extradition treaty. was unconsifutionst oughout the drug world, however, it is widely believed thet Lehder was extradited becanse his fellow drug dealers viewed Pat as a liability, and wanted him out of the busines, Lekiees ot Teagues felt he was talking too much, using eooaine heavily: Sof thal his eons were attracting oo mush Public alain hex cording to these sources, the cartels lot the Colombian governnacc. know they would not object to his extradition. «__ih® extradition problems in Colombia have pointed up the signif. icant and more generic problems of government corruption is hs country. John Lawn, DHA Administrator, testiNed that teres uals who cannot be corrupted are given the option of ciiter ne weal and judges in Colombia are given that particular option-—hat is ‘the money or be klled—even those, good individuals i Yoaey'¢ _Indeed, the Subcommittee was told that m mbian offi. dials had sold out to the cartels: For exampla Leigh Soe ound ‘the Colombian law enforcement non-existent,“ . . you could load right at the dock in certain cities where the loading would take place, you know a city, or pay terminal...” 5° Floyd Cariton described how the murder of Jisstico Minister Bo- nilla was actually coordinated with individuals inside the minisiry: 15 ited en etinony of Roan Mian Rodrigues June 25,366, 8k Sich, Part 2 pas. ES “Ym there with Jorge, Fabio [Ochoa brothers}, both of them. . . . and suddenly, I heerd a conversation in which right—apparently right from the ministry, offices of these people, information was being given to them. Apparently, they knew that this gentleman was going to leave the position of ambassador, and he was going to go somewhere else.” Concuusions ‘The Colombian drug cartels have succeeded, at least for the time being, in securing their havens of operations against, government attempts to crush their activities. Using violence and bribery, they have made it all but impossible for the Colombian government to arrest and prosecute them. ‘The United States has not devoted the necessary resources to law enforcement intelligence gathering. The cartel, as General Gorman has pointed out, has better equipment than ‘the U.S. Air Force. General Gorman testified that “they use satellite radios. They have encryption deviees and yoiee privacy mechanisms.” *# Perhaps the most effective weapon that the United States had against the cartel was the extradition treaty with Colombia. Extra- dition to the United States might cause serious damage to the cocaine trade, but the cartels have been most effective in preventing serious consideration of that solution within Colombia. ‘Moreover, extraditing major narcotics traffickers from Colombia and most other countries may well have become further complicat- ei by the death penalty provision in the 1988 omnibus drug Dill. ‘According to Assistant United States Attorney Richard Gregorie, mast countries, including Colombia, will not extradite one of their citizens if that individual might face the death penalty in the requesting country. Gregorie testified before the Subcommittee that for this reason he thought the death penalty was “counterproduc- tive” to bringing the drug lords to justice. °* There is contradictory evidence over the amount of narcotics assistance that the United States has provided to Colombia. The State Department claims to have given Colombia substantial assistance with which to wage the war on drugs. However, according to General Gorman: ‘We have been promis- the Colombians material help since 1988, We simply have not delivered. Whether that help is radars or modern helicopters or ac- ‘tionable intelligence, the rhetoric of the United States has consist- ently outrun its performance.” °* Based on testimony, there are areas in which the United States can help Coldmbia ‘ight against the cartels. These include an increase in specialized assistance in communications and training for antinarcotics police. General Gorman suggested that the United States should strengthen efforts to work with the elements of the Colombian military and the police who have shown that they are ‘willing to take on the drug traffickers. = 1 Geoton Depoton, ibid, p47 ‘Gorman, Part ZB34 Finally, economic conditions in Colombia demand U.S. govérn- ‘ment, attention. The cartels’ stature and powér has been strength. ened by their offer to pay off the government's $10 billion external debt, and by pumping billions of dollars.into the de Colom- bian economy. U.S. efforts could offset the cartel’s position by working with members of the Colombian government on debt relief solutions and long term economic development schemes. As in so many Central and South American nations, deteriorating economic conditions foster opportunities for subversion of democratic institu: tions and policies. : = Page Lurr InvmynionaLLy BLANK co)36 NARCOTICS TRAFFICKERS AND THE CONTRAS, I Dvreopucion The initial Committee investigation ‘into the international drug trade, which began in April, 1986, focused on allegations that Sena- tor John F. Kerry had received of illegal gun-running and narcotics ‘trafficking associated with the Contra war against Nicaragua. ‘As the Committee proceeded with its investigation, significant information began surfacing concerning the operations of interna onal narcoties traffickers, particularly relating to the Colombian. based cocaine cartels. As a result, the decision was made to incor- porate the Contrarelated allegations into a broader investigation concerning the relationship between foreign policy, narcotics traf ficking 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 or ganizations, and elements of the Contras themselves knowingly received financial and material assistance from drug traffickers. In ach caso, one or another agency ofthe U.S, government hed infor mat ing the involvement either while it was occurring, or Knmediately 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 oper- tions 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 tg the Contras tn some casos after the trlfickers hed been dicted al 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 ac tivities 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 traificker like George Mo- rales hoped to have his drug indictment dropped in return for his financial and material support of the Contras. Others, in the words of Mareos Aguado, Eden Pastora’s air force chief 37 ._..- took advantage of the anti-communist. sentiment which existed in Central America ... . and they undoubtedly used it for drug trafficking. 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. I. Tue Exscurtve Branca Response To Con7ea/Dauc CHARGES In the wake of press accounts concerning links between the Con- tras and drug traffickers, beginning December, 1985 with a story by the Associated Press, both Houses of the Congress began to raise juestions aboiit the drug-related allegations associated with the Giniras, causing a review in the spring of 1986 of the allegations by the State Department, in conjunction with the Justice Depart- ment and relevant US, intelligence agencies. Fol 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 ‘took place during the period when the resistance was receiving no US. funding and was particularly hard pressed for financial support.” The report acknowledged thet, “... drug traffickers ‘were atiempting to exploit. the desperate conditions,” in which the Contras found themselves? ‘The Department had suggested that while “individual members” of the Contra movement might have been involved, their drug trafficking was “. . . without the authori- SNe ee ee ey mae lowi 83 reports linking contra supply o to narcotics, and inquiries from the Foreign Relations Committee to the State Department concerning these links, the State Depart- ent iseued 9 scond statement to the Congress concerning the al- tions on July 24, : : : veer hls report the Stato Department sad, “the available evidence points to involvement with drug traffickers hy a limited number of persons having various kinds of afbliations with, oF political sympathies for, the resistance groups.” * Kyonr later, in August 1981, the CIA's Central American asl Force Chief became the first U(S. official to revise that assessment +o spggest instead that the links between Contras on the Southern Front in Costa Rica io narcotiog trafficking was in fact far broader, ‘than that acknowledged by the State Department in 1986. “Appearings before the Iran-Contra Comtnittees, the CIA Central American Task Force chief testified: 7 Gutcommitoe depen ef Mares Aguado, Part 8 286, . 2 SQiguniac Micon. bye Nicaraguan Democrtle Rectan” Sato Department ocunent 9908s, Ape 1, 8 Sate sant document #51306, July 26,1880"38 With respect to (drug trafficking by) the Resistance it is not a couple of people. It is a lot of ‘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. The Justice Department was slow to respond to the allegations regarding. links between drug traffickers and the Coniras, In the Spring of 1986, even after the State Department was.acknowle were problems with drug tr gin adsociation wit Contra activities, on the, Southern Front, the Justice Department was adamantly denying that there’ was any substance to the hart cotics allegations. At the time, the FBI had significant information regarding the involvement of naredtics traffickers in Contra oper: ations and Neutrality Act violations.* The failure of U.S. law enforcement and "intelligence agencies to respond properly to all concerning’ criminal aetivity relating to the Contras was demonstrated by the handling of the Com. mlltee's own investigation by the Justice Department and the CIA in the spri 4 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 recolved information of Neutrality Act violations, gun ranni g trafficking in association with Contra organizations: on the Southern Front in Costa Rica. va In the days -leading “up to ‘the ‘meeting,. Justice Deparument spokesmen were stating publicly that “the FBI had conducted an inquiry, into all of these charges and none of them have any sub. stance At that meoting, Justice ant officials. privately contradicted the numerous public statements from the Depariment that these allegations had been investigated thoroughly and were determined to be without foundation. The Justice Department oft cials at the meeting said the public statements by Justice were’ “in. accurate,” ® The Justice officials confirmed there were ongoing Neutrality. Act investigations’ in connection with the allegations "aged by Senator Kem. same meeting, tatives of the CIA. categories denied that the Neutrality Act violations raised by tis Caeestaee staff had in fact taken place, citing classified documents which the CIA did not make available to the Commitise. In fact, at the time, the FBI had already assembled substantial information confirming epg stinony of Coneal American Task Form Chit, August 6, 1067, 300-11, pp ce aes eae ee ae eae eect hase eee u, gue Siauear reece sede pe eed a ESE a at tp Onan hay 8b Ramos te Yr aide BAe lems fay 6,308 mating Subcammitie Sen 39 the Neutrality Act violations, including admissions by some of the persons involved indicating that crimes had taken place."® Jn August 1986, Senator Richard Lugar, then-Chairman of the Committee anid thé ratiking 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 nareotics. trafficking and illegal gun- running. The Justice Department refused to provide any information in response to this request, on the grounds that the informa tion remained under active investigation, and that the Committee's “rambling through open investigations gravely risks compromising those efforts.”2 ‘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 Jus tice Department had met in 1986 to discuss how “to undermine” Senator Kerry's attempts to have hearings regarding the allera- tions.1= ‘The Subcommittee téok a number of depositions of Justice De- partment personnel involved in responding to the Committee inves: ligation or in prosecuting allegations stemming from the Commit- tee's investigation. Each denied participating in any agreement io obstruct or interfer’ with a Congressional investigation. In order to place in their proper perspective the attempts to interfere with, or undermine, the Committee investigation, a yy chronology has been prepared which appears at appendix A of this report. IIL Tax Guns anv Dauc Smucciine Inrrastaucrunn Devevors 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 commmonplace. Gorman stated further that: “If fou want to move arms or munitions in Latin America, the estab- Uahed networks are owned by the Cartels Tt has lent dielf to tke purposes of terrorists, of saboteurs, of spies, of insurgents and sub. versions.” #5 DEA Assistant Administrator David Westrate said of the Nicara- guan wars It is true that eae on both sides of een the Nicaraguan war) were drug traffickers, and a coup] them were pretty signficant.'* = 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 Sandi. nistas were supported by most governments in the region. Those TEE aoe, Ut at Men Naren en Cope peg ur te eae a apts eat Soi en iia cn ae A on REA my Gear Gren Tonay etn "Saboomeatescstumony e* David Westratos, Par July 12 1868 pride40 governments helped provide the FSLN with the money, weapons, and the sanctuary they needed to overthrow Somoza.* Costa Rica, which has dozens of unsupervised airstrips near the ‘Nicaraguan border, became an important supply and staging area for the Sendinistas. Thes¢ air strips were used by Noriega and others for shipnients of weapons to the Sandinistas.+® Former senior Costa Rican Law enforcement officials told the ‘Subcommittee they were instructed to keep their narcotics investi. gators away from the Niedraguan 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 controvery regarding the war, ignored the tips and let the ts go.3 hamimber of Costa Rigips became eupplier forthe Sandinistas ese included Jaime “Pillique” Guerra, who owned a crop dusti service and a related aircraft support business in northern Costs Rica. Guerra refueled and repaired the planes which came from Panama loaded with Cuban weapons for the Sandinistas}* Guer- ra’ 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 authorities. When the Sandinista insurgency succeeded in 1979, smuggli activity in northern Cosia Rica did not stop. Surplus weapons orig nally stored in Coste Rice for use by the Sandinistas were sold on the black market in the region9 ‘some of these weapons were - Shipped to the Salvadoran zebels,from the same airstrips in the ‘same planes, flown by the same pilots who had previously worked for the Sandinistas, 2° P Costa Rican law enforcement authorizes said that the drug traf. ficking 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." Wernér Lotz, & Costa Rican pilot serving sentence for drug smugeling, 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 fallking about 50 men to cover 400 kilometers maybe.”?? \sTatrviews conducted by Senetor Jen B. Kerry with curent and former Costa Risen law enfant otal Sar daze Gta Rss Oicear int *Gulcomatioe estan of den Manon Past, Hebary 0, 1968p, 19-19, {Ee Blgriwgns Rlnop cs Ls Subiomalites lowed secon wilt Werner Lat, Part 4 Api 8,188, p. 67; Blandon test: sony Dart pes le Car, Pare Sp dg” Tt APES 18 nd mecha tony Perey. 612 sol Subtstontstnony of Franc J Ml, Part Tc Bata Pach and Ma Pare psd Seren npg ania Toes at * en any 41 TV. DauG Trarricxine anp tHe Covent War 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. *? Fo their work on behalf of the Sandinistas and the Salva- doran the Colombian and Panamanian drug operatives were well positioned to exploit the infrastructure now serving and sup- Bij the Contra Southern Front. This infrastructure was increas ingly important to the drug traffickers, as this was the very peri in which the cocaine trade to the U.S. from Latin AmeteS 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 activities.” ‘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 tie early days of the establish- ment 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.” * ‘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 US. policy makers were not immune to the idea that drug money was a perfect solution to the Contra’s ing 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 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. While the tion was rejected by the DEA, the fact that it was made highlights the potential appeal of drug prof its for persons engaged in covert activity. ‘Lotz aid that Contra operations on the Southern Front were in fact funded by drug cperations. He testified that weapons for the Contras came from Panama on small planes carrying mixed loads which included drugs. The pilots the Weapons, refueled, and headed north toward the U.S. with drugs.** The pilots includ: ed Americans, Panamanians, and Colombians, and occasionally, uniformed members of the Panamanian Defense Forces” Drug ‘Loe Bat, p. #80 eas Part or SER Rh eve Home Schummtie on Cre Jy 28,1985 sD, srIbie PR ea42 pilots 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” => ‘The problem of, drug traffickers using the airstrips aleo used to supply the Contras persisted through 1985 and 1986. By the summer of 1986, it became of significant concern to the US. Gov. ernment officials who were involved in the covert Contra supply ‘operations undertaken during the Boland Amendment period. Ag then-CIA Station Chief, “Thomas Castillo” testified tothe Iran/ Contra Committees, US, Ambastogor fo Costa Rica Lewis Tambs want place guards on the secret Contra supply airstrip at Santa Elena in Costa Rice, to avoid: ee having drug traffickers use that site, and this was a con- Hinuing concern during the period’ of Jane, July and ugust.29 ‘The concern highlights the degree to which the infrastructure used by the Contras and that used by drug traffickers was poten. tally interchangable even in a situation in which the U.S, govern. ment had itself established and maintained the airstrip involved. V. Taz Priors Pilots who made combined Contra weapons/drug flights through the Southern Front included: ia —Gerardo Duran, a’ Costa Rican pilot in the airplane parts supply business. Duran flew for a variety of Contra organiza: tions on the Southern Front, including those affiliated with Al. fonso Robelo, Fernando “El Negro” Chatnorro, and Eden Pas. tora, before U.S. officials insisted that the Contras sever their ties ‘from Duran because of his involvement with drags? Duran was convicted of narcoties trafficking in Costa Rica in 1987 and jailed. —Gary Wayne Botzner, drug pilot who worked for’ convicted szauiggler George Morales: Betmer testified that twice in 1984 he flew weapons for the Contras from the US. to northern Costa Rica and retirned to the United States with loads of eo- caine. Betzner is presently serving a lengthy prison term for drug sinuggling. 52 —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 US?= VL US. Government Funps anp Companies wrrm Dave ‘ComnsctioNs The State Department selected four companies owned and operated by narcotics traffickers to supply humanitarian assistance to the Contras. The companies were: 22 Key ntocien in Cota Rie, i 3 Castle dpoaiin foi p. SEE 22 Tats Pag ts LAH of den Pstra to David Saliva and Assistant Sorter of . ‘Stgie ot Abrams, Ape 3,3 3 Subcom of Gary Betmer, Par 3, Api 7,19, pp 252-265, 32 Ragert W, Oven Ei es raha, May 16136. sale Sesto Sams Owen 0 oliver No gel HE pes ad 43 —SETCO Air, a company established by Honduran drug trafficker Ramon Matta Ballesteros, —DIACSA,,a Miami-based air company operated as the head- peters of a drug trafficker enterprise for convicted drug traf- Erigorion 46 Puntarenas, ¢ Bar areel and operated —Hrigerificos de Punt "2 firm owned and operated by ee ewe ~Vorten, it air service ‘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 hhad received information that the individuals controlling these companies were involved in narcotics icials at NHAO told GAO investigators that all the supply Gonttactoré were to have been’ screened by U.S. intelligence and law enforcement cles prior to their ees eae rom State Department on behall-of the Contras to igure thet they were aa involved with criminal activity.** Neither the GAO nor the NHAO were certain whether or not that had actually been done.+ The payments mada by the State Department to these four companies between Januery and August 1986, were as follows: SET, fo ae tensort services. S185 92195, BIAGSA foc silane cago pr hee icoribis bs nssreeas a's ieee 2519200 Seaetr Seta ae ene 8054019 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 cdntras, to which the Subcommittee hhas been unable to obiain clear answers: —Who selected these firms to provide services to the Contras, paid for with public funds; and what criteria were used for s&- lecting them? —Were any U'S. oficial in the CLA, 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 bel ‘the Contras? —Why were Contra suy not checked against federal law enforcement records that would have them to be either under active investigation as drug traffickers, or in the case of DIASCA, actually under indictment? Ambassador Robert Duemling, Director of the Nicaraguan -Hu- manitarian Assistance Organization (NHAO), who was responsible for the operation of the program, was unable to recall how these Gompenies were selected: wher questioned ty Senator, Kerry in ‘Spel 1988.2" Ambassador Duemllag aloo could not secall whens: 3 Bibcommite interviews wth GAO analsts, Sepiambor 23,1988, 5: Stbeeiesiforiow with GAO analyet os crv wh Ambostador Doering, Aggie be Sore fr 1 Supplirs: GAO Anal of NHAO Anson fa gure provided 1g Seren fo ste Sees Sc Mey ers et “Reming sitet to Senator Karey, Api 6 198.4 ‘or not the contractors had in fact been checked against law enforcement records prior to rectiving funds from the ‘State Depart- ment. 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. sing contractors.°7 At best, thése incidents repré: ig government officials le tras. At worst it was a matter of ties of companies who use legitimate activi narcotics trafficking. : ‘A. SEFCO/HONDU CARTE . Before being chosen by the State Department to transport ‘on behalf of the Contras from late 1985 through mid-10ee, Seren had a long-standing relationship’ with; the largest of the Contra groups, the Honduras-based FDN. -Beginiiing in 1981, SETCO wea ‘the ‘principal company used by the Contras in Honduras to tract xt supplies and personnel for the FDN, carrying at least a mil- ion rounds of ammunition, food, uniforms and other military supplies for the Contras from 1983 through 1985. According to testimo- any before the Iran/Contra Committees by FDN. leader Adolfo Calero, received funds for Contra suy ly operations from the contra accounts established by Oliver North2* 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 con nection th drug tafe ig charges caused riots outside the US. in Tegucigalpa. For example, a 1983 Customs Investigative Report states that “SETCO stands for Services Bjectutivos 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 nar. coties into the United States.” 9° One of the pilots selected to fly Contra supply missions for the FDN for SETCO sas Frank Moss, who has fey musslo investiga tion as an alleged drug trafficker since 1979. Moss has béen investigated, although never indicted, for narcotics offenses by ten differ. ent law enforcement agencies,‘ In addition to flying Contra supply missions through SETCO, : ‘Moss formed his own company in 1985, Honda Carib, whieh also flew supplies to the Contras, including weapons and ammunition Purchased from RM. Equipment, an arms company controlled by ‘Ronald Martin and James McCoy.*? 2 Hem Oonta depo of Raber Dowling, Append B, Volume 9p. 0-1 2 Soe ran Sate ttmony of ho Clon, Abend & Vous BP "® Oates ers er es tess oa, Peon Ore aa, 300," Ae + ages, Si Ste ys pe peg Semere Hecate Ripe Sor Bee Te ay. + 0009888, Miami Fonds, Pebmary #8 1086, fe shipments fr “Arnted Felse of Hosters? 5 The FDN’s arrangement with Moss and Hondu Carib was pursuant to @ commercial agreement between the FDN’s chief supply of ficer, 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.#* ‘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 plane.** A socond DC-4 cantrolled by Moss was chased off the west coast of Florida by the Customs Service while it was dumping what appeared to be @ load of drugs, according to law enforcement person nel. 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.** A law enforcement: inspection of the plane revealed the presence of significant marijuana residue.*® seized the air craft on March 16, 1987. B, YRIGORIFICOS DE PUNTERENNAS Frigorificos de Punterennas is a Gosta Rican seafood company which was creatéd 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.*® From its creation, it was operated and owned by Luis Rodrigues of Mi, Florida, and! Carlos Soto ad Ubaldo Fernander, two eon- vieted drug traffickers, to launder drug money.*? Luis Rodriguez, who according to Massachusetts law enforcement officials directed the largést marijuana smuggling ring in the history of the state, was indicted on drug trafficking charges by the federal government on September 80, 1937 and on tax evasion in connection with the laundering of money through Ocean Hunter on April 5, 1988.38 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- ‘AOommeres Departinents Ship's Export Declaration for R/M Byuipmont, Ine, fo # $008 amy Forde et $ Canam repos, NOE "hid p28 4 Adtras bak sed by Cems, Por Charlie, Florida, NESE, March 16,1987 < Sabgmaitee sal interew with Sharify inveasgntrm Pari Chast Cousty, Parida, ay 188 3 dren jury satment of Clg Stoo fle in US. v. Rodrigue, 9-122, USDC, Northern Disrigh of Frida, September 9, 186 and Gabcommidos txcinay’ of Raton belts eae fu, Pat 2, Hobriry Vy 100, pp 20-Bi;dovasents seed a US Ail eros Fras io of US x. Laie Rodrigue, S-O104, US Distee Out for the Northern Distt of Flori gS vals Hepat Bh Cig US Dk Cae Se ae RE of aie &a count. Rodriguez was also president of Geean Hunter, an Ameri can seafood company creatéd for him by Ramon Milian Rodr guez.*° Ocean Hunter imported seafood it, bought from Frigorificos and used the intercompany transactions to launder drag money.51 In statements before a Florida federal grand jury in connection Ths peveaestreicking prosecution of Luis Rodrigues, Soto tec tified that he knew Luis Rodriguez as a narcotics trafficker who hhad been smuggling drugs into the USS, since 1979. Soto also test’. fied 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 1988. 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.*? In Soptember, 1984, Miami police officials advised the FBI of infor they had received that Ocean Hunter was funding contra activities through “narcotics transactions,” and nothing that Luis Rodriguez was its president. This information confirmed previous accounts the-FBL “had received concerning the involvement of Ocean Hunter and-its officers in. Contra ‘supply operations involving the Cuban American community.>* : Despite the information possessed by the FBI, Customs and other law enforcement agencies documenting Luis Rodriguez’ involve: ment in narcotics trafficking and money laundering, the State De- partment used Frigorificos,-which he owned and operated, to deliver humanitarian assistance funds to the Contras in late 1985. Of. cial funds for the Contras from the United States began to be de posited into the Frigorificos account in early 1986, and continued ‘until mid-1986.5° 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. ing and money laundering. In August 1986, the Foreign Relations, Committee asked Justice whether the allega” tions about Luis Rodriguez were true, and requested documents to determine whether the State nt might have in fact pro- Yided finds to a company controlled by drug trafiickers. Justis re fe hadltinont Fe Rodrigue drug 18 e indictment of Luis Rodriguez on drug charges 18 months later demonsttated 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 in, Ta etic nah ten te gant Staley toms en meee fe Corporate Record, Horde Seovtary of Sate Qo Huser, Ine 2 Se a ie en ete Sue Sede se ane Rage ASE The ae ii 8e hy nit tee SASERE ETE ie ies a Nan oar, in ¥S 6 Corn Soutern Butt cf FSi, a Oo St ore [i GAO Anaiyn.of NEEAO Payiments, Western Hankaphore Suheommites of Howse Fereign Atiais Coauniton May 1880; baling ons 'y Westra Hemisshro Subooae a fact chosen companies operated by drug traffickers to supply the Contras.£* ©. DIACSA DIACSA was an aircraft dealership and parts supply company partly owed hy the Guerra family of Costa Rica. DIACSA's preci lent, Alfredo Galan, as under DEA investigation for cotaine trafficking an¢ lering when the State Departmont chose the company ta be an NHAG supplier. Caballero wae al teat 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 Spo- cial Agent Daniel E, Moritz described working as an undercover money Jaunderer “for the purpose of introducing myself into a criminal organization involved in importing substantial quantities ‘of cocaine into the United States from South America.°" That orga nization was the Carlton/Caballaro partnership. According to Agent Moritz, the cocaine traffickers used DIACSA offices “as a lo- ‘cation for planning smuggling ventures, for assembling and distributing large cash pr of narcotics transactions, and for placing tel cals in furtherance of the emugyling ventures.” * From March 1985 until January 1986, Moritz received approximately $3.8 million in U'S. currency from members of this organi zation “to be distributed, primarily in the form of wire transfers ‘ground the world.” Most of the $3.8 million was delivered in DIAC- '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 Caballe- ro.” The informant added that “Caballero provided aircraft for Floyd Carlton Caceres’ cocaine smuggling ventures” and that Ca- o 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 trans- ‘actions 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.” 5 Other members of the group were Miguel Alemany-Soto, who te- gruited pilots and selected afreraft and strips, and Cecilia SaenzBarria, ‘The confidential informant said that Saeriz was a Panamanian “in charge of supervising the landing and refueling of the tion’s aieraft at airstrips on the Panama/Costa Rica border and that he “arranges for bribe its for certain Costa Rican officials to enture-the protection of these aircraft as they head north loaded with cocaine.” 6 US. v, Luis Rodrigue, id, Nortcen Distt of Merida; GAO analysts of NHAO poy m4 ' Aitidattof Daniel Mort, Special Agent for the DEA January 1085, US. v, Coren et «a, 3D Hid, 8570- Morte Ate, pp. 4 8 nt4B 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 wore 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 Janu. ary 28, 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, 10986. ‘Despite the indictments, the State Department made payments on May 14, 1986 and September 8, 1986, totaling $41,120.90 to DIACSA to provide services to the Contras.$¢ Jn 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 ents 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, US. Embassy personnel in Panama and Costa Rica were mocting with one of the defendants to discuss purchasing Cessna planes from the company. Each of the defendants in the DIACSA case was ultimately con- vieted on charges of importing cocaine into the- United States. The sentences they received ranged from ten years for one non-cooperating defendant, to nino years for Floyd Carlton, to three years probation for Lutis Caballero and five years probation for his father, DIACSA’s owner, Alfredo Caballero, as a consequence of their coop eration with the government.°5 D. vortex When the State Department signed a contract with Vortex to handle Contra supplies, Michael B. Palmer, then the company’s Ex- ecutive Vico-President signed for Vortex. At the time, Palmer was under active invéstigation by the FBI in three jurisdictions in connection with his decade-long activity as a drug smuggler, and a fed- ‘eral grand jury was preparing to indict him in Detroit.°" ‘The contract req ‘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.*? “ppm wept A le pm ey pales Se Se at BN By ‘Moston for Permian 2 Trwrel US, Gabaling SD flerla, B70-Eh July 16, 1988, Sooper ee eg ee ‘Mig Paar, Por Aor 108 po Sh 8 i an ‘Palmer, Past 2, p. 205 ond Palmer Subcommittee Da p= §, 1988, pp. 75-18, see upg bony Suet (eine CVSM CED LSE Ds or 49 Vortex was selected by NHAO assistant director Philip Buechler, following calls among Buechler, Palmer, and Pat Foley, the president of Summit Aviation.°® ‘VIL. Tae Case ov Groncx Monates anp FRS/ARDE, In 984, the Contra forces under Eden Pastora were in an increasingly hopeless situation. On, May 80, 1984, Pastora was wound- ed by a bomb at his bese camp at La Penca, Ni 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.°? Despite continued pressure from the United States, Pastora refused to place his ARDE forces under a unified command with the the Contra organizations—the Honduras based FDN. ‘The considered Pastora to be “disruptive and unpredictable.””*° 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 condi- jons.”?* .cies among the parties as to when Pastorals organization was op- lombian drug trafficker living in ‘Actorling to the ‘Stato Department seport fe Soke of jepartment, report to of aly 36 1886 + Information developed by the intelligence community in- dicates that a senior member of Eden Pastora’s Sandino Revoh Front (RS) in late 1984 with (Mo- rales) that FRS pilots would aid in transporting narcotics in exchange for financial assistance... . the FRS official reed to use ERS operational facilities in Costa Rica and to facilitate transportation of narcotics. (Mo- rales) agreed to provide financial support to the FRS, in addition to aircraft and training for FRS pilots. After un- dergoing flight training, the FRS pilots were to continue 1 ‘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.”® ‘The State Department said it was aware of only one incident of drug trafficking resulting from this agreement between the Con- tras 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.*® Duran 3 eg a ee iy Sra ee (Cid Central Ameria Task Rove Cyt, August 5 16,100 pp ISS _ “PGactlo suecutipe easton, ian/Caniea eb Ea. 7: Suhsenmittee depen of Octaviane Osa, San Jon, Cats Ric, October 2, 057, Bart 3, Plas Benorimmn dosumant 6819p 550 yas an FRS pilot from 1982 to 1985 and operated ‘an air taxi serv- ee in Costa Rica. According to Marco Aguado and Karol Prado, Daran would fly supplies to the Contras on the Southern Front and he would charge for each flight.* ‘Hubert Oaks couric foe Lt. Cal. Oliver North, testified to the Iran/Contra Committees that he told North he thought Karol Prado was involved in trafficking out of Panams, and that Pastora's pilot, Marco Aguado, was wwolved.*# The Subcom- mittee was unable to validate. Owen's claims, Prado vehemently denied these allegations stating that he believed the drug fraffick- ing allegations against Pastora were the result of a CIA effort to discredit him. Morales testified that his involvement with the Contras started in 1984 at the urging of Marta , the widow of one of his drug pilots, Richard i? Stara Heelys first husband was Adolfo oe 3” Chamorro, the second in command. to Eden Pastora in the "She came from a prominent Nicaraguan family. FART the Lime of his feet contract, Morales was under indictment for marijuana em . He testified that he thought by assisting the Contra cause his i sat would be dropped. Marta Healey introduced Morales to Popo Chamorro, Marco Aguado and Octa- viano Cesar at. a in Miami. to Morales, he wanted to mako deal could hip the Contras wits ther needs, and ‘‘they in exchange wot ip me with my objective, which was solving my indictment.” Morales believed the Contra Teaders would help him solve his legal problems because of their contacts with the CIA.7® “ign ootaber St, 1987 in San Jose, Costa Rica, the Subcommittee ‘the depositions of three Contra leaders with intimate Latnoelge 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 Octa- viano Cesar who, along. with his brother Alfredo, were political Bllies of Pastora’s at the time. A fourth, Ado “Popo” Chamorro, ‘ho was Pastore’s second in command in ARDE, testified in closed session of the Subcommittee in April 1988. Chamorro’s testimony ws taken in closed seston ly the coment ofthe Subsommitiee his request. Dick McCall, of Senator 3 pel in an arrangement worked out with Chamorro and his attorneys, subsequently interviewed him in Miami, qobeth denied Tniowing that Morales wes wader indictment for irug trafficking when they first met him at Marta Healey’s house $TWhtnt Pops Chamorre said that as far as he knew Morales was just another rich Miami resident with strong anti-Communist feel- RE ulation, all thyoo donied 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 by Ty pipe ction of Mas Agus ad a Prd Pst 2 tie iar Her OapSoprte Veli re i Baier ieee Be {SRS ef Cid More, Part Ape 78 3 BSP an tecimony of Adsfo “Popa” Chamero, Apel 6,188 1. BL ‘Morales; which he donated to ARDE, from Haiti to Hopango Air Force Base in El Salvador.°° ‘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 In September, Popo Chamorro returned to Costa Rica with photographs of a DO-4 and lanes ineibding ¢ Nevajo Ponther from Gessge Moran planes, ‘a Navajo re Morales.*# Pastora told Chamorro’ that the C-47 was the most practical plane for the Contras at the time and Popo returned to Miami arrange for its transfer, Chamorro provided the Subcommittee with an aircraft porchase sider, dated October 1, 1084 The notarized purchase order provided that for the sum of one dollar, a McDon- nell-Douglas:DC-8, the civilian designation for a C-47, would be ‘transferred to Marco ‘The order was signed iby George ‘Mo- rales, as the seller, and by Marco Aguado, as the put Jn addition, Chamorro, gave the Subcommittee a list of flights made by that C-47 to ferry arms from Hopango to Costa Rica and La Penta. Between October 18, 1984 and February 12, 1986, some 156,000. pounds of matsrial were moved from Topango to air fields in Costa Rica. Of the 24 flights during this iod, eleven were to ‘La Penea on the Nicaraguan side of the Rio San Juan.* "the Gubsonsmitios sehsiontiatod key clomouts of the Morales story, although iE di not fiad evidence that Cesar, Chamorro, or jo were involved in drug trafficking. First, all witnesses agreed that Morales gave ARDE a 0-47, Evidence of an as- fosiation between them is alzo provided by a Customs document. ‘his document, provided the Commitize by the U.S. Customs Serv- ice, shows that Morales entered the United States from the Baha- mas on October 18, 1984, with Mareo Aguado, Octaviano Cesar and Popo Chamorro, ‘They earried $400,000 in cash and checks which ‘were declared by Aguado, Chamorro and Cesar. They claimed that the ches and money were returned to Morales after clesring Car ms.°* ‘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 nareaies smuggling. According to Aguado, the trafficking organizations, “took Vantage of the anticommunist sentiment which existed in Central America... . and thoy undoubtedly used it for Referring io the Contra resupply operations, Aguado said the tra fickers used “the same connections the same air strips, the same people. And maybe they said that it was weapons for Bden Pastora, and .it was sctually that would later on go to the US.\.. . They fooled people . . . Unfortunately, this kind of ac- Bid, pe Facing of Har Pra, Part 8 28 Sn, pp. 6-2, 5 Goeth pp. 3-22. 1 Dopeaitane of Agtado, Prado and Cesar, Part , pp 277-288 and Chamoer, tid, po. 16,20.52. tivity, which is for the freeing of a people, is quite similar to the activities of the drug traffickers.”°* ' Octaviano Cesar testified that when he dealt with Morales he ‘Thinking in terms of the security of my country. Tt just didn’t enter my mind that T would become involved in such a mess, because it never entered into my mind to get in that [drug] business - . T went a couple of times inside in Nicaragua and I saw people there. Young kids 15, 16 years old, they wore carzy- ing 40. rounds ammunition, against — the Sandinistas . . . And that’s why I did it. I'm not proud of it, but I just didn’t have any ehoice. I mean, the U.S. Con- gress didn't give us any chooe. They got these pegule into @ war. ‘Tho poople went inside ‘of Nicaragua, 8) miles inside, They had thousands of, supporters, campesinos there helping them . . . Now, when those people retreat, those campesinos were murdered by the Sandinistas. 1 don’t want that, but that’s the reality of life.*° In addition, Cesar told the Subcommittee that he told a CIA officer about Morales and his offer to help the Contras. Senator Kinny. Did you have.occasion to say to someone in the CIA that you ware getting money from him and you ‘Were concerned he was a drug dealer? Did you pass tha information on to sainebody? * Mr. Cusan, Yes, T 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 Tlopango also, and ‘any person or any plane landed there, they had to ¢6—— senator Kimany, And they basically said to you that it ‘was all right as long as you, don’t deal in the powder; is that correct? Js that a fair quote? fae 7 Mr. Crsar. Yes.*? After the La Penca bombing of May 80, 1984, all assistance ivas cut off by the CIA to ARDE, while other Contra groups on both fronts continued to receive ‘support. from the U.S. government Ghrough variety of channels: The United State stated. that the eutoff 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 Geraldo Duran a5 ong of his drug pilots, and Duran worked for Alfonso Robelio and. Fernando, el Negro” Chamorro, who were ‘associated with other Contra groups, es well as for ARDE.S® In a sworn deposition which was taken in San Jose Casta Rica by the Subcommittee on October 31, 1987, Karol Prado, Pastora’s treasurer and procurement officer, veheniently denied ‘allegations 68 concerning the personal involvement of ARDE leadership in drug trafficking. Prado said that because of Pastora’s problems with the US. 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 traffick- Bhomas Castillo, the former CIA station chiet in Costa Rice, whe was indicted in connection with the Iran/Contra affair, testified before the Iran/Contra Committees that when the CLA became aware of narcotios trafficking by Pastora’s sui anid lieuten- ants, those individuals’ activities were ‘o law enforcement officials.*° 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, 1 ‘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 tho offer on his behalf several times, but on each occasion the U.S. Attorney, Leon. Kellner, refused.2* Leon Kellner and Richard Gregorie, then the head of the crimi- pl division of the Miami US. Atlorney’s ofice, met with the stat 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 from meeting with Morales at that time, and the staff respect- ed their request. Kellner and Gregorie said that Morales was like many Miami cocaine traffickers who use the "I was working for the CIA” defense.?® Following his testimony before the Subcommittee, Morales re- nowed 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 in- Folyiaph examination on his tzxtimony Ueloe the Sabconenloes raph examination on his testi fore 1 mamittes End he was considered truthful= VIL. Jon Hun, John Hull was a central figure in Contra operations on the Southern Front when they were managed by Oliver North, from 1984 through late 1086°© Bolore that accorting to former Conta fart Pad, Ps 9S See Nath Dn QDS 4 Bere rps Bass fon Sone Selle cates BS tt cS 1 Bicone testinary of Googe Movahes Pst eG 16 Ep 1: Dawid Reany end Apy Seema ofthe Senate Fortin Ralions Gomttee staff and Dick wggien Eamets Sea a eS MEESST sa Lam ce an? Hors sue SR nk age @ 4/41, O25, OL, OS 0, 08, cry 1 Bakr WO ay = 1150 ram a BMH, pp,O-20 and Gxtber 1,188. SS BVO RMSE SARS eet cde ay 1 ber, IS baaEg Rican CIA station chief Thomas Castillo’s pubtie testimony, Hull had helped the CIA with military supply and other operations'on behalf of the Contras.°* In addition, during the same period, Hull received $10,000 a month from Adolfo Caleré of the FDN—at North's direction. ‘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.*" Using their money and adding some of his own, he purchased thousands. of acres of Costa Rican farm Lana Provence 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 air- Strips became known as John Hull’s ranch. 7 ‘On March 23, 1984, seven men aboard a U.S. government owned ‘DO'S wero llled when the cargo plane crashed near lle sane, revealing publicly that was allowing his property to be used for airdrops of supplies to the Contras** 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 ac. tivities as 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 tinder Eden Pastora.°? 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 the was actually present to witness egcaino 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 alleg- edly flew drugs to Hull's airstrips. Lotz described the strips ‘a5 “a stop’ for refuel basically. The aircraft would land, there would be fuel waiting for them, and then would depart. They would come fa with weapons and drugs.” Lotz eaid that Hull was paid for allowing his airstrips to be used as a refueling stop 10° ‘Two witnesses, Blandon and Ceriton recounted an incident involving the disappearance of a shipment of 538 kilos of cocaine owned by, the Foreira or Call encaine cartel ‘Teofilo Weison, a member iton’s smugeling operation, was fiying the plane to Geta “Risa for the Cartel. ‘The’ plane crashed and. Wateon was, Killed. The witnesses believed that the crash occurred at Hull's ranch and that Hull took the shipment and bulldozed the plane, a Cesna 810, into the river. mcmama at al RB ate BAP en, snd 3, ih tn 0, sree Pitted Sr od a. we pecaah ones errs ram Gan © Gon moe Te eeise ce tc eri 8 108 Babeatultiee depurtion of Werner Lots Pun {Jape 8, 1986, pp. 1-682, 601-606 55 Carlion testified that the Colombians were fi see 7 the eévered the cocaine missing. He said they sent guna and in fact: Kidnapped a meinber of Hull’s. family. to force return of the cocaine. When that failed they became convinced that Carlton himself stole the cocaine and they sent giinmen after him: ise gunmen dug up Carlion’s property in Panama with a bickhos a the’ Tost cocaine, and Carlton fled for his life: to * Gary Betuner started fying far Morales’ drug smuggling network in 1981. Betzner testified that his first delivery of arms to the‘Con- tgs. was in 1965, when he flew a DC, carrying, grenades and mines to Hopango Air Foree Base. in El Salvador. His co-pilot on {he trip was Richard Healey, who had flown drugs for Morale 02 ‘Botzner said the weapons were unloaded at Tlopango by Salvador- an military personnel and an American whom he assumed worked for the US ‘Department of Detense. Hetener testified that he aod Healey flew the plane on to Colombia where they picked up a load of marfuma gpd returned to their base af Great Herbor Cay in “-Acoording to Betmer, the next Contra weapons and drugs flight took place in July 1984, Morales asked him to fly a load of weapons to Hull's Fanch and to pick up-a load of drugs. Betzner flew a Cessna 402-B to John Hull's ranch. According to Betzner, ho 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. ‘Bettner ther flew the plane to a field at Lakeland, Florida.*®* ‘Yet another guns for drugs flight was made two weeks later, On this trip, Betzner he flew a. r to an airstrip‘called “Los Llanos,” n miles from Hull’s properties and not far from the Voive of Auiérica 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 losded-for the return flight to Florida.t0® ‘Hull became the subject of an investigation by the U.S. Attorney for the Southern District of Florida in the spring of 1988. Tm late March 1085, Assistant USS. Attorney Joffrey Feldman and two FBI ‘agents ‘went to Costa Rica to investigate Neutrality Act violations hy (participants in the Contra resupply, netork ‘that, were, also investigation at the time’ by Senator Kerry. Both the Feld- man and Kerry inquiries had been prompted in part by statements male to soldiers of fortune imprisoned in Costa Rica who alleged John-Hull was providing support for the Contras. with - ‘the help of the National Security Couneil.!9e ‘Feldman and the FBI agents met with U.S. Ambassador to Costa Rice, Lewis Tambs, and the CIA Chief of Station, Thomas Castlio, Sakcomaiee, of Ppé Carton, Part 2, pp, 905-57; Subsommitice ot egg Blaon Per 2 9p SA eee Sr beoon Hat FD, 28, 208 I, pp. 201-3 84 Ih, Bp 26220T; so alse Morale tstinens, Part 8, pp. 2UI-204 and DEA polyzraph of ERs po. 260207. 101 lar Gintan potion of elfey Feldman, Appendix B, Vlas 10, Ape 80, 987, yp. T= 1 Satatent of Seen Gace sl Felon Gibery to Seana rae Sass 856 ‘who told hin John Hull. knew: Rob Owen and Oliver North and gave ‘the impression that Hull had been working for-L for-U.S, interests prior.to, March of 1984. In addition, one of the embassy sy securit f- ficers,.Jim-Nagel, told one. of the FBI agents accompanying man, that, regarding Feldman’s inquiries, “.-. . these were ‘agencies with’ other .operational requirements and’ wevshouldn't interfere with the work of these agencies.” #07 When Feldman-attempted’to interview Hull, Feldman learned that Hull was told by the embas+ sy staff not to talk to him without eat attorney present.'0® & Feldman concluded that U.S. Embassy’ officials in Costa Rica were taking active measures to protect. Hull. After Feldman inter- ‘lewed two of the mercenaries, Peter Glibbery and Steven Carr, r6- garding their allegations of Hull’s involvement in criminal activity; Feldman learned that Kirk Kotula; Consul in San Jose, was “trying to-get Cart and the rest of these people to recant thelr statements regarding Hull's involvement with the CIA and with any other American agency.1°° Feldman added-“. . . it was apparent we were stirring up sore problem with ‘our inquiries concerning John Hull.” 1° Feldman concluded that because Hull was receiving protection from some US officials, that'it would ‘not be pos- Bible to Interview, him. Feldman therefore took no Rarer steps to oat Yn an éffort to’ stop the ih ation against: him ‘and to cause the’ Justice Department to i investigate ‘hae erp. vestigation of Hull, Hull pre falsified affidavits jailed ‘mercenaries in Costa’ Ried to U.S. Attorney Kellner. In the affida- ‘its the mercenariés accused Congressional staff of paying wit- Aanseatine Cones aapolt neewest the tice Department, ult a 1¢ Contras supply n ¢ Just ulti mately concluded that the affidavits had been forged. Kellner testi fied fied Ghat be “had concerns about them, ‘and .1; . didn’t believe ‘Fo this day, the Justice Departmiait has iaken no action agains John-Hull for obstruction: of justice or any related charge'in connection with his filing false affidavits’ with-the U.S. Justice Depart: ‘ment 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 Gorpo- ation for $575,000 which’ ultimately proved to have been obtained with:false documentation. - In 1988, Hiull-and' two associates, Mr-Wiliam Gione andMr. Alvaro Arroyo aipproachid OPIC for a loaii to'finance a joint ven ture wood products factory that would miake wheelbarrow and ax handles for the U.S. market. In fact; aecording 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- SAR glide tetinoy of oon Kaas ’apiendx By, Vo 1, ap 8, p. Gat. oT ‘tion, somé supporting doctimentation ‘and a site visit, on March 30, 1984, OPIC advanced $375,000.11# ‘By the end of 1985, after one interest payment, the loan lapsed into defauilt, and OPIC officials bezan to recognize that the project was a fraud, and that Hull had made false representations. in making the application to. OPIC.""* OPIC officials found that the money which was disbursed by their Agency was deposited in Hall’s Indiana bank account and the funds were withdrawn by Hull in cash. When OPIC inquired in 1986.as where the funds were ;, Hull told OPIC officials that he would be’using the cash to fy Gosia Ricsn money on tho black market fo get & more favor, exchange rate. ‘Tn fact, Costa Riva has a favorable exchange rate for foreign investment and thé éxcuse Hull offered does not make sense, What appears to have happened is to ‘Hull simply took the money, in- asmuch as no equipment was purchased for the factory, no prod- ‘ucts were shit mm thand Hulls partner, Crone, testified that he never saw the money. Indeed, prospective purchasers complained that they paid Hull for produets in advance but never received delivery.?*® ‘On the basis of the subsequent OPIC investigation of the loan to Hull's company, in Aj 7, the case was referred to the Justice Department for a criminal fraud investigation.17 While nothing has yet happened for almost two years, the Justice Department maintains the investigation is still ongoing.'!° OPIC foreclosed on the properties Which Hull had put up as col- Jateral Tor, 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 purchesing its own property for $187,500. ‘OPIC then attempted to sell the property directly. An advertise. ment was placed in The Wall Street eJournal which attracted = ‘single offer from ani investment banker in Philadelphia. An agree- tent vag negotiated whereby the company purchasing the proper- ‘ty 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 fullled ly the purchasers of the land, OPIC will realize repayment of $187,500; half of the original $375,000 loaned to Hull.##° 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 fajled to purchase the properties he said he would, and in one case, eaetony of eg Gefte:Vien Pees ad General Cuan, Overs rae Jo syatuent Corgationy Subeoraitn ou Tntgatiqnal Bsoaosic Paliy, ‘Nee, Oceans and Ba ee ‘Teoria, Nori and Intsmational Oprsonas Pat, OS ae sailise terete wiih OPIC and Justice sal, Jannary 1963. 29 OPIC daeaments provide! the Subcomaalton58 took. form equipment off,» furm he was pald to manage and con- verted it for his own use.220 J mid-January, 1989, Hull was arrested by Coste Rican Jaw enforcoment. authorities and charged with drug trafficking and violating Costa Rica's neutrality. TK: Tar SAN FRANCISCO Frociaan Case: UND-FRAN aX PCNE ‘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 réport to. the Congress on Contraelated narcotics allegations, the State Department described the Frogman case as follows: “This-case gets it nickname fram swimmers whe brought cocaine ashore on the West Coast from a Colombian yesselin 1982-1983. It focused on a major Colombian cocaine smuggler, Alvaro Carvi Minota, who supplied a number of West leged, but fever confirmed, that Nicaraguan their ‘he money that was fears tal hoon teeed $e na be "ing 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.228°" = eee a ‘The Subcommittee found that the Frogman arrest’ involved ¢o- caine from. a Colombian source, Carvajal-Minota. In addition, Zavala and Cabezas had as a’second source of supply, Nicaraguans Hving in Costa Rice asosited with tho Contras, FBT doetments from an case iaentify the Nicaraguans as rel ra, Troilo Sanches and Femando Sanohce ae {25 Gubsomnitice ustinoay of Crap, Sipple and Hand, iid, pp. 16-167 1 Sata Dopartent Donumene Sede Sly 3,198 $3: Son Prauctaco Banner axes Tee" 2 See fovmber 8 1982, PB alejpe Sri Sax Prandica ta Diedor, US v. Zable ta 59 Pereira was convicted on cocaine charges in Costa Rica:in 1985 and sentenced to 12 years in prison.*#* An important member of the Pereira organization was Sebastian “Huachan” Gonzalez, who also was associated with ARDE in Southern Front Cotitra, operations. Robert Owen advised North in February 1985, that Gonza- lea was trafficking in cocainé.’®® Jose Blandon testified that Eden Pastora knew that Gonzalez was involved in drug trafficking while he as working with ARDE. Gonzalez later left the Contra movement and fled from Costa Rica to Panama, where he went to work for General Noriega 1#* During the Pereira. trial, evidence was albo presented by the Costa Rica prosecutor showing that drug traffickers had .asked leader Ermundo Chamorro the brother of UDN-FARN leader Fer- nando “El Negro” Chamorro, for assistance with vehicles to trans- ort cocaine and for help with a Costa Rica police official. 12* ‘Troilo and.Fernando Sanchez were marginal participants.in the Contra movement and relatives of a member of the FDN. Director- ate. 4 XX. Tue Coman-Anmeican CONNECTION Several groups of Miami-based Cuba Americans provided direct and indirect support for the Southérn 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.?5° ‘The State Departrient described the allegations in its Juily 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 traffick- exs. 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.181 125 GBS Brenig News, June 2, 1968. 10 ean/ Conte st Babort Owen, Mey 14, 1087, Exhibit RWO 7, pt. icq and Mae” ‘Rot leis of Social Agrot George Kiceynli, releaud In 18 v. Calero and US. "Corb, both Sonthern Diss of SIRS Interview of Banke Canto, 12/20/84 Sane ‘ist of Hapa! Torres Jancnen $/U88 tpeeviow of Bene Croboy 90/84 interview of Joos {Coating so sso grand jury tema of Carlos Soto in US. Lule Rédrgues, Norohern Bsr fF. ‘Slate Department Document 5156, July 26, 1865. 6 Gn May 6, 1986, Committee staff met swith representatives of the obvious that Robert Owen warned Lt. Col, Oliver North at the NSC Justice Department, FBI, DEA, CIA and State Department, to that the"Gubans (are) involved in drags"2°7 advise thom of allegations of gun miming and drug traficking in ‘Notes taken by Colonel Robert L.. Earl during his tenure at the oe nee itis group. nate NSC descritied how in August 1986, the CIA was worried about oe Departing fogerine 9, egugtedinforniation femthe | disreputable characters in the Cuban-American com- ‘i dal, Frank Cone munity that are sympathetic to the Contra eause but caus. sie Cee i ole Fad a a sn og earcres me ae ful in how one dealt with the Cuban-American community in . and its relation to this, that although their motives were * im the right place there. was a lot of corruption and greed ‘and drugs and it was a real mess.125 In August 1988, Corbo and Castro were indicted in a Neutrality Act case involving. the Contras brought by the U.S. Attorney for F Miami and secuted by Assistant U.S. Attorney Jeffrey Feldman. “ ms had Nownatooticerclated aldgatons were include! i ther tare a fe ‘without foundation. #4 indictment.!®> ‘At no tite did the Justice Department disclose to tlie Committoe One of the three principals in Frigorificos de Puntarenas and in done to its iy ‘that extensive information had in fact Ocean Hunter, Luis lez, was indicted on drug charges in been developed by the FBI from 1083 through 1986 suggesting that April 1988. The others, Frank Chanes and Moises Nunez, partici: jnany of the allogations the Cammities was investigating: wore pated in Contra ‘assistance operations in 1984 and 1085120 AE the May 6, 1986 Com Priggridcs Go Pentaresen snd fy Chae Robe an eipg, ant, e May 6, 1986 meeting with Committee staff, the CIA cate- ‘gorificos de Puntarenas, and by Glenn Robinette on behalf o ically dented that weapons had boom stags ite, cate the Second-North Enterprise. Former CIA Costa Rica Chief of Star {he United States on the flights involving Rene Corbo, noting fon Thomas Castillo told the Iran-Contra committees that Nunez the material on which they were basing these swertiome weg, “was involved.in a very sensitive operation” for the Enterprise \< that Classified, and suggested that the allegations that had been made te the contrary were the result of disinformation." " XL Ramon Mnitan RopaiGuez anp Feurx Roprratez In fact as the FBI had previously learned from informents, A particularly controversial allegation arose during the course of Guban American supportérs of the Contras had shipped weepet the Tose investigation, ae ages Guring the cours ‘Ro from south Florida to lopango, and from there to John Hille ait driguez's offer to assist: the Contras, following his arrest for money strips in Costa Rica.t®* The persons involved admitted to the FEL Jaundering. tae that ‘they: had participated in such ‘shipments, making general In a June 25, 1987 closed session of the Subs Statements about them: begining in 1985. On June 4, 1966 oral driguez testified that in a meoting arranged by Miami private de- June 16, 1986, Rene Corbo, one of the principals in the shipment teotive Raoul Diaz with Felix Rodrigues, he (Miian) offered topes explicitly told the FBI that he had | Pixticipated in shipping weap- vide drug-money to the Contras. Rodriguez stated that Felix ons to the Contras in violation of US Neutrality laws. accepted the offer and $10 million in such assistance was subse- ‘The Cuban-American contingent Supporting the Contra effort on ‘quently provided the Contras through a system of secret couriers the Southern Front work with Pastora until May 80, 1964 bombing Milian 1ez testified that he also offered to ascist in entrap. at Le Penca. After the assassination attempt on Pastora they: shift ping the Sandinistas in a drug sting—all in return for dropping the ed their allegiance to Fernando “El Nogro” Chamorro of UDN~ charges then pending against him. . FARN. By midvJime 1984, the drug smuggling through the South. Felix Rodriguez strenuously denied Milian Rodrigued’s version of ern Front zones controlled by the Contras had grown sufficiently the méoting, stating that he reported Milian’s offer io a number of US.governiment agencies, including the PBI and CIA. No’ action snyp Lair dobn Baton to Senator Ricard Gaga and Senator Clore Pll. Aug 1, > as taken by thooe agencies, and Milian Rodriguer's ease wont to ace Hatemege: of DOF epokeanen Pat Karten to Notions! Publio Radic, May 5, 1966; Now "R i 1d to a Committee subj to dis Nore Tes May Tk Haterens of ecian Heanak Vana mai Mey 51 Raoul Diaz refused to respond to a subpoena to dis- sen ace ‘ostene Se wenaraly else i ‘meeting. : _ a Ean ae ges ar ences Seecaray Rie cuss his recollection of the meeting. Therefore, because of the diff i Winer Soom, May 6.2966 meotng, Sabummtes 17S eral Sn utes el 9 Sp seta cas taeda US. Cnt iB, Vo 9 9.008 PREFS Cle: SD, Florida 2088; aduaisions of Ramon, Milan Rodrigues te Gace in Ss ee ae ae ey E Behar iss 6 gn: FOL 202 of 8 Hiaynks 3, ABT A02 of SA Kiyomi, olen in Uv, Corba SD Flac, 1988, cain Aypenti Bet Sh so ‘Appendix B Vol 2, pp. 1-785: epson of Hhomas2 culty.the Subcommittee faced in ascertaining who i na an ea in. who was telling the asked err Palian ia irieuee or Felix Rodriguez—Milian’ was viding Senator Kerry, the Subcommittee Chairman, the country’s leading polygraph experts, Dr: Borald Brokes eae niversity of Utah, fo travel to Washington, D.G to asi ee ‘test. Dr. Raskin administered @ Partial examination of Milian Ro- di ez on June'3~4, 1988. On two critical questions, Ramon Milian gz's| Answers ‘were determined to be deceptive by ‘De Raskin The questions were as follows re 2 ae the Contras during the meeting at Raouleofieey i of MONEY for ‘Answer, 923. : : 2. Did you arrange approximately five deliveri Contran on the basis of phono calla you seer of money for the Rodriguez? 2. “Answer, yes. On the third question, Dr. Raskin could not determine wht or not Ramon’ Milian Rodri ing tr inhas venom eget se being truthful in his response. . id you arrange the déliverics ‘of at least $5- million Contras using the procedures that you and Felix eames oso? the APE t it, Milian Rodriguez stated that he did’ ni continue the examination. Based upon Dr. Tasks oat valuation dr ie al ee crm cel a a et Sy Sm ling Sue Gna a amen le not truthful. The Chairman: reached no. conclusion issue of whether Ramon Milian *Dunng Fate Rea Subcom uring Feli ‘iguez’ public testimony before the Subcommit- tee on July 14, 1: Senator y i lie Ren ay 4 1988, poe flated that he did not believe pon Milian 6 £ vs ul General Norioga’s role in narcorafficking, and his tavern es footing up companies which’ were later used to support the Con: tras, was corroborated by @ number of witnesses, “including Jose Biandon, Floyd Cariton, Gerald a Miami had supplied information gn the Gortale ns © Sis eon dopa 3 i points was corroborated by extensive documentary eck rand jury slaiamonts by his pariners i fedora Cotaied posed CUBA AND NICARAGUA Ierropucrion PiOE trafficking knows xcither national nor ideological bound- aries, as evi bs i Ghent i ea Tenced by allegations of Cuban and Sandinista involve. : 8 “The Subvommittée ‘received testimony that throughout the 1980's, Cuba has been used by drug traflickers as a transit point and haven for latindéring money.-Cuban authorities have, provided suaugelers with protection for this beats and sireraf: According ve ‘Subcommittee testimony, Fidel Castro himself acted as a mediator on behalf of General Manuel Antonio Noriéga in disputes Noriega hhas had with,the Medellity cocaine cartel. Finally, the Subcommit- ‘tee received testimony that Cuban officials were ‘involved in efforts Yo éstablish ties between leftist revolutionary groups such as the ‘Mz19 and cocaine traffickers. Several witnesses testified that Ni¢araguan officials were also involved in drag trafficking. The Subcommittee also received testimony that representatives of the Medellin Cartel entered into negotia- ‘ions with the Sandinista government over using Nicaragua for drug trafficking operations. Finally, the Subcommittee received testimony regarding alleged statements by leaders of the Cartel that the provided assistance to the Sandinistas. ” ”Bisronrcat Backenounp Pye-xevolutiohary Cuba had an extensive tradition as a base for the smuggling of illegal goods to the United States, as far back as the 18th Century; and continuing through Prohibition to the overthrow of the Batista government by Castro. The United States bas frequently sought the cooperation -of the Cuban government in stopping such smuggling * By the time of the Castro revolution, organized crime had a significant position of power in Cuba based on the wealth it had aocu- mulated by smuggling and related illegal operations.* At the time ‘of the Cuban revolution, Castro himself claimed one of his objectives was to cleanse Cuba of the environment of corruption. Since then, Castro has-conducted a highly visible public campaign against smuggling, and the Government of Cuba regularly issues rts highlighting its successes in the war against drugs. » Subcommittee received testimony that despite Cuba's ageres- sive publio stance against narcotics, during the 1980's Cuban off cials had again begun to provide assistance to.drug smugglers. x, + Copa’as a Way-Sratton rox SmueGLEns Cuba lies on the most direct air route from South America, to Florida, Due to its sizo, unless smugglers,g¢t overflight rights, hundreds of, miles ‘are added to their‘trips. This greatly increases the Tendo thsy ext Gute natwoally ae the volute ef Stage motes loads the /. Quite naturally as the volume of moving {nto south Flora by air increased mn the carly 1960's the tnarheke ers became interested Jin obtaining overflight rights from the Cubans. Elements of the Cuban government began to offer assistance. According: to smugglers, this assistance was gradually extended to refueling end repair services, assistance in laundering eee te egpiigerstret Oheentiretpeatgeen es, (Martin, The Cube Fsurrection 1850-108, p.64 Benggat ‘Providing safe haven from-U.S. Jaw enforcement’ ‘au- “phitis, Garcia. told. the Subcommittee a n officials. him, use of in Cuban Navy. The four officals in a smuggling conspiracy bat wore Sams geste ee ee es Soe gel ot tet cn States from Colombia. Both are scheduled to go to fits ted Case History: Gzonor Moraes” Aen Tile experience of Colombian drug trafficker George Me {ised insight into the opportunities ‘afforde’ waceeees grales rs ing in Cuba at which Cuban officials offered to sell in their airspace.® relationsh: Se A Berag of time, By 1580, he chiang Geba's agen i allow ‘his pilots ovérfli Gahan epee 1° tn § vided Morales wit event of an emergengy.tt no A i ban assist: ‘was’ the 6 Protection or beals and alirraft-used in Gr comugaien sat? < Safcommiteo tatimony of Coongs Morales, Pait 8, ail 7, 294-2 2 RESEi Say Seana sg ate DiS oleh ease oreo ee obese iettes lay an cea oe tee 1 paupsre? Statement of Richard Gregocie, Past 4, July 12,198, pp. 288-99, Bose egret gene Monnsrns atria y os 1s Morales, Past 1, July 15, 1987, i ee SE ; 65 ations. Morales was also given'the opportunity to buy drugs Cuban authorities had seized. from other traffickers.1® Morales testified that the Cubans sold him the radio frequencies of the U.S. Coast Guard, Secret Service, Drug Enforcement Agency, Customs and local U.S. law enforcement agencies."® He said their only motiva- tion was obtaining US. dollars." Morales testified that Cuban cooperation with him did not end after his 1984 indictment. Instead, the Cubans offered him the op- . Cayo Largo, Morales was able to transfer his drug monoy to other banks around the world.!? Ibroroaroan Use or Daves In fhe late 1970's Castro identified what has beon referred to as the “natural-m: ” between, the ‘drug traffickers and revolutionaries.'* ‘The trafiickérs have the money which the revolution aries need to launch their operations, and the revolutionaries con. ‘rol the land and the people'the traffickers need to grow the crops and ron the processing laboratdries.1°- _ Jose Blandon -told ‘the Subcommittee of Castro's decision to become involved withthe traffickers.*° According to in the late 1970's; Castro decided to use the growing power of dag ‘twaffigkers and. drug money to export revolution throughout Latig America. Castro's overall aim was to influence events in Central America by simultaneously aligning himself with narcotics traffick- Qs and regional ‘military leaders, following the example set by Gastro pare a by, working closely with the M19, The uurstie wor! with the M-19. ‘M=19 received advice and assistance from the Governme of Cuba even as it reached a working agresinent Cartel’s following ‘Maintaining cisindhipbatween the and th intaining a relationshi mn the Cartel and the various Colombian’ guerrilla movements has been a significant policy goal of ths Cabs goverment. Blandon iestiied that Castro assigned Cuban Ambassador to Colombia, Ravelo-Renédo, the task mediating the relationship between the guerrillas and the Cartel. According to Blandon, Ravelo-Renedo reported to Manuel Piniero: the head of the Cubar Communist Paity’s Latin American. Depart, ment.# A witness at the Miami conspiracy trial in which Ravelo- 1s Moca, Pat 8p 996 and Pat, pp 05-66 Moras bet 95 3 Senay Cain of wor Sansa, Partly 2 a yo agg gy Fa ofSone Banden, Part Feb, 188 pp 105-108, Sasson The mittee testimony of Ramon Mion Rodrigves, Pact & pp. 240, 255-25; Bandon, Shandon ntineny, Pvt 9p 205-10166 Rene indictod cogonspirator, quoted the hich ranking Eben idols as saya, Wel hem: {the Americans} in Guten, of ; ‘ E Cups, Panansa, AND THE CARTEL ' sdiator 30t limited to dispiites between ie peortilee an tie Cavtce” Atomting to Jose Blahdon, Castro also acted as a mediator in a disy between the Medellin Cartel ‘ahd Noriega. The dispute arose when Noriega raided a Cartel labo- fatory in the Darien province of Panama'in June, 1984, arrestin: 28-employees of the Cartel and seizing millions of dollars’ wortts equipment and drugs after aczopting 85 million from the Cartel to protect it. ‘The pase to Noriega in revenge, and Nor- tamned'to Castro for help2e ; wR Nonega’s request, Blandon, met with Castro in Havana on He eesittn protertion money and ytara the planes faroonadl and million in protection money an: Plant,, A aanenr io ie Garlel © Dering bis taatimony, Bigidon produced Bhotographs of himself with Castro which he said were taken Suring that: meeting. ‘The photographs were sent.to Blandon by Cuban ‘intelligence three months ater the meeting. They were auade part ofthe earng record and were use by the Miami grand STi tetibed Wat S wesk later, on Jume 27th of 28, Nor- iega and Castro met directly in a meeting that lasted five to six hours. At its conclusion, Noriega told Blandon ‘that. “eve hhad been arranged and they were going to proceed acc to Castro’ "28 Although, a deal with the Cartel had been concluded, Noriega was sill concerned that hig life was in danger, as about ‘one hundred ‘members of. the Cartel were living. in Panama.** The Cubans sent a 25soldier ailitary Unit to fly back with Noriega to Panama to ensure his saféty until the terms of the deal with the Cartel could be carried out.°° Castro Deis IvvoLvEseNt : del Castro 1 denounced the Blandon testimony as a fabnication, in Pema lengthy interview with an NBC reporter. He denied the allegations that he mediated the dispute between Nor- jega and the Cartel. In addition, Castro said that-Cube was not involved in trafficking and offered to prove it. He said that if the 8 lee members would st Cuba they would seo "xe itable idence at Blandon Lat . Aiea ior Koray the Sebcommitice Chatman, told a representa: tive of the Cuban Interest Section in We n that he would not visit Cuba unless staff was permitted to ‘advance the trip’and 7 Gregore Propared Seatomant, Pst 29. 2: Sabor tatiaty of Seo Bladen, Part 2, Feb 1985, pp 101-105. ir : 6 unless the Cubans sgreed to discuss the drug trafficking problent in general. Senator Kerry also requested that Subcommitteo, staff be allowed to interview Robert Vesco during the course of the visit. ‘The Cubana never replied, to any of these requests and never made any further ents. for the visit 8 Cor ence, try any further arangee sequence, the trip AlLpsamions ConciRNING NICARAGUA In 1984, the Cartel explored using Nicaragua as’a site for the transshipment of cocaine and mioney laundering. Finding alterna. tives to Colombia was important. because the Colombian authorities had raided and destroyed several “Cartel laboratories in the Amazon region. Further, Colombian authorities -dramatically increased their pressure on Cartel operations after the murder of Sustice Minister Lara-Bonilla. in Panama, where a base of oper ations had been established, General Noriega was in: gregsed control of the drug trade and a larger share of the prof Floyd Carlton testified that, Pablo Escobar sent him to Nicaragua toc in 084." fst tine he went with Rleardo Bilontl a bust ness r of General Noriega’s, to deliver money. said hhe did not Imow who the money was for since Bilonik handled the delivery. The second trip to Nicaragua was to locate airstrips which Lould be used for the transshipment of narcoties.°* Carlton, was told by another pilot that the Cartel needed long range planes and airstrips with extended runways to handle flights carrying cocaine paste from Bolivia to Nicaragua. This led Carlton to assume Were processing laboratories in Nicaregua.** During the. same period, Escobar asked Ramon Milian Rodriguez {e galore the possiblity of starting drug-related. operations in Nicaragua, documenting them, and then using the information to rfbmnon Blan Rodger” acnunt of a reqs » Ramon account of this requést is supported by the testimony of a Miami attorney who first met with lawyers for {he Cartel in Bogota in 1985 and later with al the Cartel leaders in In Detaber, 1986 the Miami Attorney began talking to the FBI and the DEA about his meetings with the L He was given @ polygraph examination, which he passed. He told the DEA that during early 1986, a Bogota lawyer for the Cartel told him that the Cartel wanted to make “a deal with the U.S. Government for im- munity from prosecution, and they, in turn, would help stop the flow of cocaine into the U.S.” * : ‘The Cartel Jawyer told the Miami Attorney that Cartel leader ‘Ochoa “finances both Sandinista and antiSandinista forces in Nicaragua by setting up drag operations there.” ©° 3? March 1d, 1988 meeting bbwoen Dopey Cif tg Caiban Tterest Spetion in Washington 1, es ue on Senn PS Sah ong a 2 eStats Gono a Say Carn, Be S80 p UF Hadas tiney, Dart Dagizten of Floyd Carine, Dee 4, 1087,» 89. 2 Chas Segnan testimony of Ramon Milan Tune 25, 1987, pp. 58-55, 2a iia ich Be ke Sea ™ oR6 The Miami Attorney then met with Jorge: Ochoa ‘and other leaders of the Cartel. At these meetings in ledellin, Cartel principals told the Miami Attorney that they had invited him to meet with them to act as a representative to “open riegotiations with the’ U.S. Government.” ‘Ochoa told the Miarni Attorney that the Cartel had “certain Jabbenatien which could a of interest to ie national security of the U.S.” regarding. developments in Nicaragua, Cubs, Mexigo, Panama, and Colombes? Ochoa told: the .Miami. Attorney that the’ Cartel had “worked with the Communists in the past.”;Ochoa stated that "there was a 100,000 man-army/of radicals in the mountains consisting’ of Pales- tinians, ‘terialized. The House Judiciary Subcommitiee on Crime found that the phone number used by Vaughn in calls ha received from Seal was a phone number controlled by the U.S. Embassy since 1985, 7 sc tn Pp ine 2 inate eh Atoruey, Novia 1, 7 SEE RL serene a Se eae i ens A 69 and by, the US. Embassy or other foreign missions vontinuously since 1981.46 In its Internationel Narcotics Control Strategy Report regardin; Nicaragus, the State Department noted that there is “no evidences of the uso of Nicaragua to ship drugs to the'U'S. “since the allesa- tions made in 1984” in.connection with the Seal case. “© Summany ap Conerusions.. ‘The Subcommittee testimony regarding Cuban involvement narcotics trafficking was consistent with the ‘findings of the Siace Department in its most recent U.S. International Narcotics Control Strategy Report. That report notes: USS. law enforvemelit agencies report the routine use of Caban ge and terroritorial waters as safe havens geginct US, Government interdiction efforts, Some of the its or sailings may enjoy the sanction of Cuban au- {hort there has been some reporting that Cuben a thorities’ have permitied narcotics ‘traffickers to use this strategic location in exchange for facilitating Cuban aid to guerrillas and subversive elements in.third countries” ‘As the State Department recognized, “cory ts, in coh Psi act sneered, oc xo whether the involvement of Cuban oflicials with drug traffickers is @ matter of personal corruption, or a8 Jose Blandon testified, a matter of policy by the Cuban government, HAITI Serge ‘Inmropuction i By 1985, the cartelssbegan to seek additional transit points for Cocaine coming to the United States.A natural candidate was the island-country just south of the Bahamas— Haiti. Haiti, is a.particularly appealing option for drug traffickers be- location, its weak and corrupt government, and its un- stable political situation. ‘The Island of Hispaniola.on which Haiti + ip located, is onthe: most. direct route—barring transit of Cuba from Colombia to the United States. Haiti has harbors and inlets Which effort excellent protection to drug smi vessels. More- otha Tualen At Force hos no radar, fac es and does not routinely airspace. lanes can take off an land freely at any of the island’s m1 ‘secondary airstrips? Since the day of "Papa Doc! Duvalien: Hate ‘government has’ ‘been notorious for its corruption. The Duvalier-family and their as. sociates, profited enornously from the proteciom of aera enterprises, including narcotics trafficking.* However, until 1987, Hue estinony ila “UB, Departanel of Sisto “International Nereolics Conttol Strate Rape” March, i088, Tats. Deourtnent of Sato seratnal Norte Contrel Stalag Raps March 1988 p. Tima, 150 : 4 lestimony of Thoms Cash, Part & July 11, 2088. pp 21-22. : ‘Neyeoics Conical Srategy Ropar, Barta of lnpPhational Narctis Matter, US. Dopartmant of Sate, Maret 188 He oa70 most of the drug smuggling through Haiti was conducted by individual “transportation” organizations which made their own arrangements with:the Haitian government officials. .. -.. ‘Tre CoLdampians Move IN. . Following the dey ‘of Baby “Doe” Duvalierand the posi dential elections of 1987, the ( ans took advantage of the complete breakdown of governnient institutions and began to move {nto the country in fores, They.fooused-their efforts on cocrupting key military ‘who were in a position tovassure that there ‘would-be no interference with:their operations. no According to DEA ini ce, the number of Colombian narcotios traffickers residing ‘has been growing daily and the narcotics organizations are now tsing Hait! as a base of operations, storage site and ‘area. In addition, these organizations are buying up legitimate businesses to sorve as front. companies for their smuggling operations. Once having. gained access to local comune hy’ then fdeus On corrupting, officials to protect nthe Subetniities bard ‘a detailed acoonzt of the poco th 8, a 1e frocess the Colombians used to establish themselves in Haiti from .Osvaldo intana, a Cuban-American who became involved in-drug emug- ling from Haiti to’ Miami. Quintana later testified about his ex Henee before a-Fedeyal grand jury in Miami. He explained that tho Colombians established a worki tionship with Colonel-Jean- Claude Paul by working ‘through a Haitian’ named Cardozo.’ The Colombians agreed to pay Colonel Paul, the commander of the De- sallines Barracks, for protection and for the use of runway on his ranch for cocaine flights.* Command of the Desallines Barracks allowed Colonel Paul to play & pivotal role in Haitian polities be. catiso this force is the elite unit: recponsible:for the -protection of the Presidential Palace* Colonel Paul’s influence was very much in evidence during the 1987 election, when much of the violence was attributed to soldiers sind security officials known as Tontons Se NE ee eon Paul ere to’be made by ording to Quintana, the payofis to Paul were to'be m: Cardozo on a shipment by shipment basis. In. October, 1986, Colonel dng and aed shipment of drage is prec The Colonblans i ing and seized a shipment in protest. jams in- Fostigated the seizure and found that their middle man, Cardozo, Bad been pocketing most of what they thought he had been paying Colonel Paul. The Colombians sent a team of gangsters to: Haiti and brought Cardio back to Colombia, where they brutally beat him for his “‘theft”. The money was. repaid and Paul's demands were satisfied” > : a ‘Quintana aiso.told the: Subcommittee about the efforts: Colonel Paul, his wife Marie Mireille Delinois, and his brother made to establish their own cocaine distribution system in Miami.’ Roger Teer es plore ‘ghasman aa rierkerar SEE Ew tony, oy 28 pp ane a Biamby, a Haitian community leader i mittee, that Colonel Paul and other military officers ommet oa which sailed between Mianii and Hai catarin’ cocaine, ships on Qumians’s testimony coupled with that of other witnesses led to by a iaigtment for cocaine trafficking of Colonel Paul and his wife oy a federal grand jury in Miami,30 ‘However, once indicted, they Haiti, tary, eae ae chaos continued after the first coup whi al Hensi Namphy at the head of the goverement Go eee Colonel Prosper, Avril 20. power. President and Colonel Paul was finally vember 7, 1f lonel Pau! was found dead. His wife, Marie Min eille Delinais, under indictment in Miami for drug devine tained by Haitian authorities as the murder, suspen was de- * Tele Mian Conmcrron Roger Biamby testified that government officials in Haiti ‘Miami branch of the Tentons Macoute to terrorize the Ga Sat tians into cooperating with emugeling operations.t@ Gistoes 2 second coup removed General Namphy and broueie i the Miami, S 01 - ioe Dit Hey pte be gh is, tho ca eee ey insure the silence of the Haitians who ave been used to unload drug shipments Bom toe boats ene 1 Bienbyiptinny. Br EEibat tea Bats BS ip Bsa ection.» HE BBe Nan York Times, Novrbor 1 Bisebyfstinony ei SE " Sibstnitee interviews in Mit2 ‘ DEA’s Opritirions iv Muanar awp mw Hart “The Miami police and Drug Enféredment Agency have had great’ difficulty in developinent of prosecutable cases against the principal Hitian traffickers in Miami. In order ta, penetrate the close- knit Haitian society, the authorities ely on wiretapes, informants and undercover operations. However, law enforcement agenciés employ a limited number of French-Creole speaking officers, and undercover operations have been limited as.a result. DEA regional chief Tom Cash testified that DRA operations in Haiti were also affected by this problem. Jn Haiti, DEA participates with Haitian surveillance unit in watching the Port, au Prince airport.*° However, according to testi- IBony pelos the Subeommitiag the druys rarely come threagh the airport, but are instead moved by private ship and plane through Gther transshipment points" Evan if the survellancs. provided useful information, U.S. Attorney Gregorie argued that Haiti lacks an hotiest polics force and army to make arrests and punish offenders? Moreover, when Haitian authorities ‘seize’ drugs from traf fickers, the smugglers are not only set free, but the narcotics, in. stead of being destroyed, are often resold by the authorities.** In characterizing the Haitian governmental structure, Deputy.Assist= ant Secretary of State Holwill dbierved that “. . . there is no coh- tral government . . . no judicial system . . . andthe, local army commanders function as feudal lords.” 24 7 ‘The weakness of governmental institutions in Haiti has made it extremely difficult for the DEA to carry out its nision, Ths DEA regional chief, ‘Tom Cash, testified that his agency had developed a joint DEA Haiti Narcotics Center for Information Coordination. He then conceded that because there are tio corresponding institution al struetures—such as a navy: or coast gudrd—to tackle the narcot- jes problem, the ‘iiformation center, didn’t “mean ‘much. He acknowledged, DEA efforts in Haiti are “rudimentary at best.” #¢ : Concrustons . There is little hope that serious inroads can be made into the Co- Jomabian nareoties trafficking through Haiti until lgitimate democ ratization efforts are undertaken. As long as‘the Haitian mili continues to control virtually every government institution, includ.” ing the judiciary and law ‘enforcement agenicies, the cartels will ‘continue to operate unchallenged in that country. ‘However, there‘are steps which could'be taken to make it;moté difficult for Haitians to run their cocaine distribution networks in the United States. One of these might include an immediate review the Department of State of visas which have been granted to itians residing in Miami who are suspected of being involved in the drug trade. For example, two witnesses identified Lionel 54 Ger tecinony, sp Bae 78 In addition, a major effort should be undertaken by drug-enfs pen agencies to tran cialis n the Hatten dialea Bee ee fon Jay enforcoment officials with ‘his skill whieh ht hoe oie ‘Haitian alstrbutio netesia, ete operations ret _ Direct, government-io-government ascistance, with the exceptio of humanitarian assistance provided through privew sea Capeoe agencies, should continue ta be prohibited to Haiti until leslie e, erway. democratization efforts are tm HONDURAS _ Iymepueiton Honduras has it oi 0s corn Untied Statae sings the ase Taras Rare coming to the gree number of remote dirt airstrips, long coastline and sorsiond Bay Islands, make it an attractive stopover point halfway Bericy Calambia and the United States. Colombian maria ‘smugglers smaller bowie headed ars eae in oocttateee snails h inited States. Colombian cocaine traf. ment of genie) Teadig nave 8 0 rtucng apd franship in » two large recent cocaine s teatation_evo large seizures demonstrate that the aru cone so Une U8 tori in tt, ee eee seized 8 giams of cocaine in-a.shipment of Honduran plan There evidence ea of Honda Fra which controls the polis, have. protected the Conger ailiary, ‘mocracy was presumably restored in 1981. The Hond i Boe m nm 1981. The Honduran mili 7 = Bie Cases ar ‘U.S. policies in Central America, most londuras has received large amounts of US, assistan ee tae seo lareest recipient of US reign see US. aid to Honduras ‘ conning weed Saaet son fo SS thom ca eed Se isrory o Naticones Trarricaine av Honpueas ‘Members of the Honduran military leaderghip became Bien Gooael Nedeats smug & teh aon see used his relationship with military intelligence counterpane AICS, Bate nt, Mach 1988,» 13. Headiras U8, Forsgn Asin Feds! by Robert B, Sanches Sina Berne Diesen, apesioed Se edt By ap, A ot No4 throughout Central America’to protect his arms dealings and his entry into: the drug trade. His counterpart in Honduras, the head of the Honduran military intelligence in the late 1970's and early 80's was Colonel Torres-Arias.* Jose Blandon ‘testified that Noriega drew Tortes-Arids and a close associate of his, Colonel Boden, commander of an. armored division, into the business of supplying weapons’ to the FMLN Any pameae imap innenene ore in Salvador we londuran territory and were tected by ‘Torres-Arias and ‘Boden. When ‘Blandon. Was aod whether he’ personally kmew that -weapons ‘were being shi through Honduras to the rebels in El Saivador,-he responded, “Of course.” * * ef 7 ‘He went on to testify: wo ~. , Noriega coordinated, meetings in Panama with the Directorate of the Farabundo Marti Front to establish two routes for the supply of arms to El Salvador, one «+ » the Gulf of Fonseca and another im the Nortiy of Hon- = Grapes called ie Ho Chi Minti Trail A Did you attend. any ie meetings? os »-Answer. Tatterided both meetings.® see In 1988, Noriega arranged two meetings. between, Torres. ‘Boden and the TMN rebels. Noriega wanted to have Fidel Castro introduce. Torres-Afias and. Boden to the FMLN leadership in order to facilitate thé development of,a direct relationship.®,'To conceal ‘Havana as théir real destination, Torres-Arias and Boden said they were traveling to, visit Noriega in Panama. They went to Panama but were then flown to Havana in a Panamanian. military jet for séctet meetings with Castro and the FMLN. When the word of the trips to. Havana begari to circulate among the Honduran ‘military leadership, Noriega passed the details back, to the CIA.” News of the trips catised'a scandal which led to the dismissal of both Torres-Arias and Boden from the Honduran military. ‘Blandon testified that by 1981, the relationship between Noriega and Torres-Arias had expanded into narcotics trafficking. Blandon_ also testified that he had indications that the network of clandestine ‘airstrips in Honduras which Was being used,to supply the Honduran-based Contras were being used by drug planes.® ‘Honduran coastal waters alo have been uséd to transfer marijuana from mother ships to smaller phrime boats for runs. to the United States, Convicted smuggler, Leigh Ritch testified that he had cargoes.of marijuana transferred from Colombian mother ships to their shrimp boats in Honduran waters. Ritch testified that the shrimp boat they used looked exactly like the ones the Hondurans used and blended in with the Honduran fleet. The Colombian mother ships off-loaded the marijuana to the shrimp boats at night TERS irae mana, to 6 Se ABE pear meee SB pt 1% aid the shritap boats would then head back to the Unit 20 Convicted trafficker Michael. Vogel testified that his smugelng rou was offered the same offloading use of Honduran wares" While osel testified that he never personally used Honduras, he Seams group working out of Honduras in eonjunction wit itch’s and Vogel's account of using Honduran waters transshipment of marijuana was confirmed by Toinss Lenore, the ‘He went on to say that such transshipments were fhe mailitary, When the DEA would ask the Honduran Nese 2utereept the smugglers’ hoats, Zepoda said they (Honduran naval stall for time, identifying a number of a © ‘AL the time of the arrests, FBI Director William Webster-stated: We don't want infornational_ terrorists, to. establish beachlieads or bases for operations in the United States such ag they have enjoyed for years in other parts of the Syorla.** Factual ‘Admissions by ‘the United’ States in the trial of Oliver North; released publicly on April 6, 1989, revealed that ‘‘in mid September, 1986, Lt. Col. North advised Admiral Poindexter that US. Anibassador Negroponte, General Gorman: of South Com, sonior CLA official ‘Duane Clarridge, and Lt. Col.’ North had worked out arrangements for support of the (Contra) Resistance with Gen- eral Buoso-Rosa, a former-Honduran military officer who.hed recently been convicted of offenses in the US. Lt, Col. North suggest- ‘ed that efforts be made on Bueso-Rosa’s behalf:to deter him from : rs etgecl scaly extracted fro Chile to the United “Gueso Rosa was subsequently extradited from Chile to the Unite States. While Latchinian. was convicted:by «federal jury on con- Spiraey charges and sentenced. to 80 years in Bueso-Rosa was treated very leniently. He was sentenced to five years at Belin ‘Air Foree Base federal, prison,camp ‘in Florida, after senior U.S. government officials altempiod to intercede On. his behalf since evewhe had been a friend to the US....... involved in helping us with the Contras.”2*,The Justice Department had objected strenu- dusly to the lenient ‘treatifient accorded Bueso-Rosa, arguing that the gonspiraey. was.the “most Significant ease of nérco-terrorism yet discovered." a “On November 21, 1987, Joi was arrested on a highway : Ochoa ia Colombia driving‘a $70,000 Porche owned by Said Speer, a Hon- dhran Colgnel serving a3 a military attache in Bogota. Said-Speer Sohied Imowing Ocho and sala that his use-of the car was unau- . thorized, but he could not explain’ how he was-able to. purchase suck'an expensive car on'the’ pay of a Honduran Colonel.” eee Drug Link to Soapet in Alleged Plot Agsinst Honduran,” ty Jon Nord AE Naw York Rimes November 9, 1986 ci Sle Sente, U8 v, Noh, US, District Cour, 188, £102 nis tiny of Pg Mac, Pet 6, Ser 42066, ral Conea dep colon ofr Hts hone 5 Value #8, Aas, 20 9 Ea ‘aoe in Honduras are linked tothe drag trad” by James Le Moyie; The New soruary 12,1568, A on fees a On November 19, 1987, a week after authorities in Florida », 1987, a confis- “Soa while bad Boog packed in Valin gear ous of factory, DEA announced plans to reopen tis Honduran offices *\ RaMON Matra Battisrenos jit March 1985, DEA’ Agent Enrique Camérena was kidna} ‘and bratally murdered in Mexico. Camarena had been invent ‘lardo were believed to have been partners in large cocaine smuggling ization which ‘worked through Mexico to the United States, Following nas murder, DBA began an intensive ‘Matta was born in Honduras and grew up it i He in an environment extreme pove and illiteracy. As a young man he oblained a fale isa and moved to tue United States. He was eventually captured By immigration officials and deported. He returned to the ‘Gnited ates where he was sontenced to five years at a minimum security in florida: . After serving three and one-half years of his sen- Tenic, he bribed his way out of proon and ed t Mesies vs eo Joined a,drug smuggling ring. He rose through the ranks to become one of the’ op people in the smuggling organization at the time ‘agen egan his inquiry.2* qq be tracked Matis to Cartagena, Colombia where he was arrest- ia and set for extradition. The Medellin cartel planned an escape wa. the La Picota yrison in Bogota but the warden, Alcides Aris- mendi, blocked their plans.'In revenge, the Carteal murdered Aris mendi while his car was stalled in Bogota. traffic. The Cartel’s ‘Fecohd attempt at rescuing Matta was successful: Théy paid $2 mil- Ton in bribes to the prison guards and Matta walked out of jail and lew to Tegucigalpa: Once-back in Honduras, he surrendered to authorities “on. outstanding murder charges, He ‘was subsequently found innocent and resumed a “normal” life. He believed that he ‘was safe from extradition to the United States because the Hondu- 7a cunatitation forbids the extradition of Honduran nationals. atta, who bad been characterized by U.S. Customs officials as a class 1 DEA violator, quickly become- one of Tegucigalpa’s lea citizens, “He helped éstabish an airline company, 10, whic among other services cargo transport servi. ‘panel in Honduras’! Ho fook up Gosden one eee ices giving money fo the poor, At the Same time, U.S. law enforcement. officials believed that he began running his cocaine smuggling Operation from Teguetgalpa, heir suspicions ahovt his activities: increased as the result of two largé seizures of cocaine fom Honduras in South Flotida. The seizures, which totaled more ain 5, kilos were it i Han 00 los ware bat consiled in containers shipped fom TUS, eck at Honduras as drug transfer point DEA x se : fie in Tegusientng” The gee Pee By Wien ng Dacre: Tat, pAb SCHON Pepe Sate, OSS ie Hondnes ae od? Dave von Deda Mug ral. Age ‘US: Cito invadigetin Hops May 9,195, pp Bald, Te * APT 2088,

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