CIA DEALT WITH SUSPECTED DRUG RUNNERS

The agency's inspector general criticizes official's actions at the time as
being inconsistent and sometimes sloppy.

Washington-The Central Intelligence Agency continued to work with about two
dozen Nicaraguan rebels and their supporters during the 1980s despite
allegations that they were trafficking in drugs, according to a classified
study by the CIA.

The new study has found that the CIA's decision to keep these paid agents,
or to continue dealing with them in some less-formal relationship, was made
by top officials at the agency's headquarters in Langley, Va., in the midst
of the war waged by the CIA-backed contras against Nicaragua's leftist
Sandinista government.

The new report by the CIA's inspector general criticizes agency officials'
actions at the time for the inconsistent and sometimes sloppy manner in
which they investigated - or chose not to investigate -the allegations,
which were never substantiated by the CIA.

The inspector general's report, which has not yet been publicly released,
also concludes that there is no evidence that any CIA officials were
involved in drug trafficking with contra figures.

The new report is the long-delayed second volume of the CIA's internal
investigation into possible connections between the contras and Central
American drug traffickers. The investigation was originally prompted by a
controversial 1996 series in the San Jose Mercury-News, which asserted that
a "dark alliance" among the CIA, the Contras and drug traffickers had
helped finance the contra war with millions of dollars in profits from drug
smuggling.

The Mercury-News series alleged that this alliance created a drug
trafficking network that was the first to introduce crack cocaine into
south-central Los Angeles.

The Mercury-News subsequently admitted that the series was flawed and took
its reporter, Gary Webb, off the story. He later left the paper.

The first volume of the CIA inspector general's report, issued in January,
dealt primarily with the allegations raised by the Mercury-News series and
dismissed the newspaper's central findings.

The CIA released a declassified version of the first volume, in which the
agency said the Mercury-News charges were baseless and mentioned drug
dealers who had nothing to do with the CIA.

But John Deutch, the director of central intelligence at the time, had also
asked the inspector general to conduct a broader inquiry to answer
unresolved questions about the contra program and drug trafficking that had
not been raised in the Mercury-News series. Frederick Hitz, then the CIA's
inspector general, decided to issue a second, much larger report to deal
with those broader issues.

The CIA is much more reluctant to publicly release the complete text of the
approximately 500-page second volume than it was of the first, because it
deals directly with contras with whom the CIA worked.

According to the report, CIA officials involved in the Contra program were
so focused on the fight against the leftist Sandinista regime that they
gave relatively low priority to collecting information about the possible
drug involvement of individuals in the Contra army. The report concluded
that CIA officers did report on drug trafficking by the contras, but that
there were no clear guidelines given to CIA officers in the field about how
intensively they should investigate or act upon the allegations.

Checked-by: (Joel W. Johnson)