CIA SAID TO IGNORE CHARGES OF CONTRA DEALING IN '80S

WASHINGTON, Oct. 9, 1998 -- Despite requests for information from
Congress, the CIA repeatedly ignored or failed to investigate
allegations of drug trafficking by the anti-Sandinista rebels of
Nicaragua in the 1980s, according to a newly declassified internal
report. In a blunt and often critical report, the CIA's inspector
general determined that the agency "did not inform Congress of all
allegations or information it received indicating that contra-related
organizations or individuals were involved in drug trafficking.''

Beginning in 1986, the subject of contra drug trafficking became a focus
for critics of the Reagan administration's policy toward Nicaragua who
charged that the CIA was shielding drug smugglers to protect its
anti-Communist covert action program in Nicaragua.

That year Congress imposed a fund cutoff for any contra group that had
members involved in drug trafficking. Despite that ban, the CIA failed
to tell Congress about allegations it had received against at least
eight individuals with contra ties.

During the time the ban on funds was in effect, the CIA informed
Congress only about drug charges against two other contra-related
people.

In addition, the agency failed to tell other executive branch agencies,
including the Justice Department, about drug allegations against 11
contra-related individuals or entities.

The report quotes many active and retired CIA officers who served in
Central America as saying they either did not hear or did not believe
allegations of drug trafficking involving the contra rebels, with whom
they worked closely. It also makes clear that the agency did little or
nothing to investigate most of the drug allegations that it heard about
the contras and their supporters.

In April 1987, the acting director of central intelligence, Robert
Gates, wrote in a memorandum that it was "absolutely imperative that
this agency and our operations in Central America avoid any kind of
involvement with individuals or companies that are even suspected of
involvement in narcotics trafficking.''

The CIA investigation that began almost a decade later, however, found
no evidence that the memorandum was distributed to anyone other than
Gates' deputy for operations, Clair George.

The new study is the second volume of the CIA's internal investigation
prompted by a 1996 series of articles in The San Jose Mercury-News,
which claimed that a "dark alliance'' between the CIA, the contras and
drug traffickers had helped finance the contra war with millions of
dollars in profits from drug smuggling. The series also alleged that
this network was the first to introduce crack cocaine into South Central
Los Angeles. The first volume of the CIA inspector general's report,
issued in January, dealt primarily with the specific allegations raised
by the Mercury-News series and dismissed the newspaper's central
findings.

But the second volume is the result of a broader inquiry into long-
unresolved questions about the contra program and drug trafficking.

In all, the inspector general's report found that the CIA had received
allegations of drug involvement by 58 contras or others linked to the
contra program. These included 14 pilots and two others tied to the
contra program's CIA-backed air transportation operations.

The report indicates that information linking the contras to drugs began
to emerge almost as soon as the contras came into existence -- and
before it became publicly known that the CIA was supporting their effort
to overthrow the Marxist-led government in Managua.

In September 1981, as a small group of rebels was being formed from
former soldiers in the National Guard of the deposed Nicaraguan
dictator, Anastasio Somoza Debayle, a CIA informant reported that the
leadership of the fledgling group had decided to smuggle drugs to the
United States to support its operations.

Eight months later, another report indicated that one prominent leader
of the group, Justiniano Perez, was a close friend of a known
trafficker.

The agency's response also set something of a pattern.

"No information has been found to indicate any action to follow up or
corroborate the allegations,'' the report said. "

Similarly, it said, it found no information that the CIA followed up on
FBI information about the Perez matter.

The omissions of information were often glaring.

In 1986, for example, Alan Fiers, then chief of the CIA's Central
American task force dealing with the contras, responded to questions
raised by Sen. John Kerry, D-Mass., about specific contra members and
contra-related companies. According to the report, Fiers responded to
Kerry's questions about a contra logistics coordinator named Felipe
Vidal by providing a sheet of information about his convictions for
illegal possession of firearms in the 1970s, but without any mention of
Vidal's arrests and conviction for drug trafficking.

The report said that in at least six instances, the CIA knew about
allegations regarding individuals or organizations but that knowledge
did not deter it from continuing to employ them. In some other cases,
the agency decided the allegations were not substantiated.

Checked-by: Rolf Ernst