CIA KNEW OF CONTRA PLAN TO SELL DRUGS IN US

In September 1981, as the Reagan administration was approving a covert CIA
program to finance anti-Sandinista exile organization attempts to overthrow
the Nicaraguan government, ``an asset'' told the agency that one of the
major Contra rebel groups intended to sell drugs in the United States to
pay its bills.

The cable described for CIA headquarters a July 1981 drug delivery from
Honduras to Miami, including the names of those involved, and called it
``an initial trial run'' by members of the Nicaraguan Revolutionary
Democratic Alliance. An earlier cable had said the rebels felt they were
``being forced to stoop to criminal activities in order to feed and clothe
their cadre.''

Although the cables were circulated to the departments of State, Justice,
Treasury and Defense and all U.S. intelligence agencies, the CIA neither
followed up nor attempted to corroborate the allegations, according to a
450- page declassified version of a report by the CIA's inspector general
released last month.

Nearly a decade after the end of the Nicaraguan war -- and after years of
suspicions and scattered evidence of Contra involvement in drug trafficking
- -- the CIA report discloses that the agency did little or nothing to
respond to hundreds of drug allegations about Contra officials, their
contractors and supporters contained in nearly 1,000 cables sent from the
field to the agency's headquarters.

In a few cases, the report says, officials instructed the Drug Enforcement
Administration to hold back inquiring about charges involving alleged drug
dealers connected with the Nicaraguan rebels.

Looking back, Frederick Hitz, the now-retired CIA inspector general who
supervised the report, said, ``We fell down on accountability. . . . There
was a great deal of sloppiness and poor guidance in those days out of
Washington.''

Checked-by: Mike Gogulski