CIA CLEARS ITSELF OF INVOLVEMENT WITH CRACK COCAINE

GOVERNMENT

The agency's inspector general finds no evidence to support charges
published in the San Jose Mercury News in 1996.

WASINGTONThe CIA found no evidence that its employees or agents colluded
with allies of the Nicaraguan contra rebels involved in crack cocaine sales
in the United States,a senior official said Thursday.

The San Jose Mercury News sparked the inquiry with a series of articles in
August 1996. The series concluded that a San Francisco Bay area drug ring
sold cocaine in southcentral Los Angeles and funneled profits to the
contras for the better part of a decade. It traced the drugs to dealers who
were also leaders of a CIArun guerrilla army in Nicaragua.

A senior government official, who spoke on condition of anonymity, said an
inspector general's report found no link between the CIA and two Nicaraguan
cocaine dealers, Danilo Blandon and Norwin Meneses. The newspaper series
had said the two were civilian leaders of an anticommunist commando group
formed and run be the CIA during the 1980s.

The articles traced the origin of the crack cocaine explosion in the United
States to a crack dealer named Ricky Donnell Ross, saying he got his supply
through Blandon and Meneses.

The CIA inspector general found "nothing to indicate that CIA people or
people working for the CIA or on CIA's behalf had any dealings directly or
indirectly with those people, Ross, Blandon or Meneses," the senior
official said.

The Mercury News reported Thursday on the CIA's conclusions disputing the
newspaper series.

The inspector general's report, however, has two sections. The first,
concerning the allegations raised by the newspaper, is about ready for
release. A second section dealing with broader questions about links
between the contras and drug trafficking is not yet complete, the official
said.

The newspaper series generated widespread anger in the black community
toward the CIA, as well as federal investigations into whether the CIA took
part in or countenanced the selling of crack cocaine to raise money for the
contra rebels.

The investigations did not find a link between the CIA and drug dealing.
Several newspapers also disputed the Mercury News report.

Some former intelligence officers questioned the CIA's effort.

"Their interaview with me was simply to go through the motions of touching
all the bases," the Los Angeles Times quoted former CIA officer Donald H.
Winters as saying. "They started off by saying they had no substantive
evidence that any of the allegations in the San Jose article had any basis."

In an open letter to readers in May, the Mercury News' executive editor,
Jerry Ceppos, said the series had shortcomings.

Reporter Gary Webb, who researched and wrote the series, was transferred to
a smaller bureau 10 months after the series was published. He resigned from
the newspaper last week.

Deputy Attorney General Eric Holder said he requested and got CIA agreement
to withhold release of the report and that the Justice Department also has
held on to a report on the same subject prepared by Michael Bromwich, the
Justice Department's inspector general.

Holder said his recommendations stemmed from lawenforcement concerns that
are "not related to the underlying allegations." He declined to say whether
the Justice Department reached the same conclusions as the CIA on the issue
of links to drug dealers.