JUSTICE REBUTS CIA-CRACK ARTICLES

WASHINGTON - The Justice Department's internal watchdog yesterday offered
another major rebuttal to a newspaper's allegations of Central Intelligence
Agency complicity in the crack-cocaine epidemic, releasing a long-delayed
report rejecting the most serious allegations of government misconduct.

In August 1996, the San Jose Mercury News reported that the CIA and federal
law-enforcement officials had protected major Bay Area drug traffickers
with ties to Nicaraguan contras. After a 15-month investigation that
interviewed 200 witnesses and reviewed 40,000 pages of documents, Inspector
General Michael Bromwich concluded that the Justice Department made a
legitimate effort to investigate and prosecute the traffickers.

"These investigations were not always successful, but we did not find that
they were obstructed because of claims that these individuals were
connected to contras or the CIA," he said.

The original allegations sparked outrage in many inner-city neighborhoods,
but subsequent investigations by The Washington Post, the New York Times
and the Los Angeles Times were unable to substantiate them, and San Jose
Mercury News editors later said the articles were not up to their usual
standards.

The author of the series, Gary Webb, is no longer at the paper, but
recently published a book restating his allegations: "Dark Alliance: The
CIA, The Contras, and the Crack Cocaine Explosion."

The Justice report disagreed with Webb's implication that Los Angeles-based
drug dealer Ricky Ross and his Nicaraguan suppliers, Oscar Danilo Blandon
and Norwin Meneses, were the cause of the crack-cocaine explosion in
south-central Los Angeles. He concluded that although Blandon was a major
supplier and Ross a major distributor, the crack epidemic was not the
result of any single source. He also found no evidence that any of those
suspects was connected to the CIA.

However, Bromwich did find a few faults with the Justice Department's
investigations. For example, the report concluded that Blandon was
improperly granted permanent resident status so he could work undercover
for the Drug Enforcement Administration after his release from prison in
1994. As a convicted felon, Blandon should have been deemed ineligible for
a green card. Bromwich concluded that this rule-bending had nothing to do
with any connection to the CIA.

The report also found that the CIA interceded in a separate matter
involving the seizure of $36,000 in drug proceeds from Nicaraguan
trafficker Julio Zavala in San Francisco during the early 1980s. In that
case, the report says, the CIA urged federal prosecutors not to take the
depositions of two contra officials because it feared that allegations of
ties between drug money and the contras would compromise CIA activities in
Nicaragua.

Rep. Maxine Waters, D-Calif., who wrote an introduction to Webb's new book,
criticized the report as farfetched yesterday. She noted that at one point,
the FBI had a warrant out for the arrest of Meneses while the DEA was
trying to use him as an informant, yet the report ascribed the problem to
poor communication. Waters called that hard to believe.

An earlier internal investigation by the CIA, which was not publicly
released, also concluded that there was no evidence of links between the
agency and drug dealers named in the newspaper series.