DRUG DEALER BENEFITED FROM AGENCIES' STRIFE

DEA helped him while the FBI looked for him

While the FBI searched in vain for a shadowy Nicaraguan cocaine baron, the
DEA helped him get travel visas and paid him to be an informant, a U.S.
Department of Justice report says.

Miscommunication between federal agents - along with other missteps,
limited resources and alleged sexism against a female DEA agent -
contributed to the ruthless dope dealer's evasion of justice, said the
study by the department's inspector general.

Between 1963 and 1992, Norwin Meneses, a former Bay Area resident,
allegedly killed two men, sold stolen cars, traded guns, smuggled "massive"
quantities of cocaine and boasted that he had ties to the CIA and was
supporting contras trying to topple Nicaragua's Sandinista government.

But the report last month concluded Meneses had no CIA connection and made
only modest contributions to the contras. The failure to prosecute him was
a result not of federal intervention on his behalf but of long-standing
problems in federal anti-drug efforts.

"In short, the investigation of Meneses failed because of inadequate
resources devoted to this case and inadequate coordination between law
enforcement agencies, which are recurring law enforcement issues," the
study said.

The Meneses case also illustrates the risk inherent in prosecutors'
reliance on criminals who turn informant and may seek to manipulate the
process.

"It's always been, and always will be, dangerous to work with informants,"
said Laurie Levenson, associate dean of Loyola Law School in Los Angeles.
"They work the system."

Justice Department officials declined to comment on the study. Evelyn
James, a DEA spokeswoman in San Francisco, would not discuss Meneses but
said police agencies constantly sought to better coordinate drug cases.
Informants, she added, often try to "play both ends against the middle."

Life of intrigue

Meneses, now 55, dressed well, drove a Jaguar, owned a Mission District bar
and, in the late 1970s, lived in exclusive Hillsborough. His sweeping
criminal career and the government errors that let him continue it are
detailed in the 407-page inspector's report. Neither Meneses nor his
attorney could be located for comment.

He was born into a prominent Nicaraguan family close to the ruling Somosa
government. One of his brothers was Managua's police chief in the 1970s.

But even as a young man, Meneses caught the eye of U.S. police. In 1968,
Nicaraguan officials reported he was a suspect in the murder of a Managua
"money changer" and had fled to the Bay Area. He'd already been convicted
in San Francisco for shoplifting, misuse of slot machines and statutory rape.

In the mid-1970s, he was suspected of running a stolen car ring in
California, New York and Nicaragua. Several DEA offices also heard he was
wholesaling cocaine in New Orleans and the Bay Area, the report said.

San Francisco DEA agent Sandra Smith in 1981 opened the first of eight DEA
probes of the Meneses outfit. Some of his men were arrested, but Meneses
fled, and allegedly continued trafficking in the United States, Ecuador,
Costa Rica and Nicaragua, where he was a reputed "hit man," it said.

Smith believed a federal task force was needed to take on Meneses and
offered to run it, but her boss refused. The first female DEA agent in San
Francisco, Smith later told the inspector her proposal was rejected
"because of sexism and the low status of women in the DEA," said the
report. A DEA supervisor denied that was the reason.

Willing informants

In 1984, DEA agents arrested two of Meneses' aides, who agreed to inform on
him. One was his nephew, Jairo Meneses. The other was Renato Pena, a San
Francisco spokesman for the Nicaraguan Democratic Front (FDN), the main
contra group, who said he'd met Norwin Meneses at a contra meeting. But the
DEA closed its case against Meneses in June 1986 citing a lack of evidence,
the report said.

The next month, Jairo Meneses turned to the FBI in an effort to avoid
deportation. Norwin Meneses, he alleged, had "dealt directly with leaders
of the contras and the Sandinistas since the early 1980s in an effort to
promote his cocaine enterprise. Norwin lacks any political allegiance and
will deal with anyone who will provide cocaine at the lowest price," said a
U.S. attorney's memo quoted in the study.

Meneses also allegedly arranged the assassination of a Nicaraguan customs
official who discovered he was trading guns for drugs under the Somosa
regime, the memo said.

The FBI opened its own probe of Meneses and obtained a recording in which
he discussed money laundering and his work with the late Colombian cocaine
kingpin Pablo Escobar.

Unbeknownst to the FBI, Meneses in July 1986 walked into the DEA's Costa
Rica office, offering to inform on major drug dealers. He alleged they
included Sandinista officials, which would support the Reagan
administration's public claim that the leftist government dealt in drugs.
The DEA office began using him as a source and opened "Operation Perico"
(perico is Spanish for parrot) based on his information, the report said.
"The FBI and the U.S. attorney's office in San Francisco were surprised to
learn about this use of Meneses," the report said. The lead San Francisco
FBI agent on the case "was also upset" that he couldn't interview Meneses,
it said.

The episode prompted an early 1987 agreement between the FBI, the DEA and
federal prosecutors, but it came to naught.

The Organized Crime Drug Enforcement Task Force in Los Angeles had decided
that - instead of targeting Meneses - it would use him to inform on a
fellow dealer. To accommodate the task force, the San Francisco U.S.
attorney's office agreed to delay seeking its own charges against Meneses,
if he'd plead guilty to them.

Outsmarting the feds

But Meneses apparently out-maneuvered his federal handlers. He refused to
return to Los Angeles that summer, declined to testify in court, talked
only to chosen DEA agents and demanded a promise he could live in the
United States, the report said.

The task force shut down in July 1987 with no prosecution, partly because
of Meneses' intransigence, it said.

Yet that month the wiley smuggler was formally elevated to confidential
informant for the DEA in Costa Rica. It got him one 45-day visa, then
another, to travel to Miami, Los Angeles and San Francisco to meet with
drug dealers on the DEA's behalf, the report said.

Meneses' help lead to the arrest of several people and the seizure of some
cocaine. But one DEA agent later told inspectors he'd suspected that
"Meneses may have been trying to work a drug deal on his own," it said.

And after paying him $6,877, the Costa Rica DEA office deactivated him as
an informant in December 1989 because none of his cases "appears to have
any chance of fruition," said a DEA memo cited in the report.

The U.S. attorney's office in San Francisco, meanwhile, had reopened its
case on Meneses. Another informant had told the FBI that Meneses was a DEA
informant and had boasted of avoiding prosecution because he was a CIA
informant, the study said.

But the CIA told the FBI that "a search of CIA files and indices located no
information indicating that Meneses was ever employed by or was an
informant for the CIA," the report said.

The CIA "did not have any objections or problems with a prosecution of
Menses," it said, and neither did the San Francisco DEA office.

Indicted, but working

Based on the FBI investigation, Meneses was indicted in San Francisco in
February 1989 for cocaine trafficking.

However, the inspector's report noted, "Surprisingly ... even after the San
Francisco indictment and arrest warrant were issued, Meneses continued to
work as an informant for the DEA in Costa Rica and travel to the United
States on behalf of the DEA."

As the FBI hunted for Meneses, the DEA arranged his undercover trips to
California, Miami and U.S. embassies in Colombia and Mexico, it said.

His DEA control agent later said he was unaware of the warrant for
Meneses's arrest, the report said, and "the FBI was apparently unaware of
his activities on behalf of the DEA."

In early 1990, the DEA and the FBI were at odds on the case, while Meneses
was at large.

Still, the DEA's Costa Rica office briefly reactivated the indicted Meneses
as an informant that May. DEA records contain no sign that it first ensured
the required "thorough coordinat(ion) between the DEA and FBI," the
inspector's report said.

DEA confusion

In fact, the DEA seemed to be out of sync with itself. In September 1991,
its offices in Guatemala, Houston and Los Angeles launched investigations
of Meneses, the study said.

But that month Meneses himself contacted the DEA's Costa Rica office,
offering to be an informant once again. A DEA agent met with him several
times in Managua to discuss the offer.

A few weeks later, the Nicaraguan police arrested Meneses with 1,500 pounds
of cocaine, including some hidden in cars destined for the United States,
it said.

In August 1992, Meneses was sentenced to 25 years in a Nicaraguan prison.
When the inspector general interviewed him there last year, Meneses denied
ever selling drugs. He said he gave a small amount of his own money to the
contras, raised other funds for them and recruited members in California.
As the report noted, Meneses admitted in a 1986 Examiner article that he
had sold cocaine, but only "for about six months."

The story also reported that, according to former contras, Meneses helped
finance at least four Bay Area contra functions and sent a truck and video
gear to contras in Honduras. Meneses denied that and having met FDN head
Adolpho Calero. Calero told The Examiner he had met Meneses several times,
but denied knowing of his contra contributions or drug dealing.

In response to the article, the U.S. State Department said in August 1986
that some contras dealt in cocaine, but not members of the FDN.

However, the inspector concluded that Meneses was a large-scale drug
smuggler and a member of the San Francisco FDN chapter. It said he played a
"marginal" role in supporting the contras, giving them "relatively
insignificant" amounts of his drug profits.

FDN leader Calero told the inspector he had been to Meneses' home and knew
Meneses was wealthy, but had no idea he might be a criminal.

The study noted, though, that "Meneses' reputation had preceded him in the
small Nicaraguan exile community ... people who dealt with Meneses knew or
should have known that money coming from him was likely from an illicit
source."

The inspector general's report was prompted by 1996 stories in the San Jose
Mercury News suggesting Meneses gave millions of dollars in drug profits to
the contras and was protected by the CIA or other national security
agencies. The study found these allegations unsubstantiated.

Instead, it said, Meneses evaded prosecution because federal agencies
failed to coordinate their cases against him and wavered on "whether
Meneses should be considered a target or an informant."

Meneses was released from prison in Nicaragua in November 1997.

The San Francisco indictment of him is pending.

1998 San Francisco Examiner Page A 1

Checked-by: Mike Gogulski