REPORT LINKS CIA TO SUSPECTED DRUG TRAFFICKERS

Agency worked with Nicaraguan rebels

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

in at the agency's headquarters 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 second volume of the report dismisses those specific charges, as did
the first volume.

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 series prompted an enormous outcry,
especially among blacks, many of whom said they saw it as confirmation of a
government-backed conspiracy to keep blacks dependent and impoverished.

The Mercury News subsequently admitted that the series was flawed and
reassigned the reporter, Gary Webb, who has since left the newspaper.

In the declassified version of the CIA's first volume, 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.

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: Mike Gogulski