HANDLING OF CIACRACK PROBES DECRIED

Rep. Waters Blasts Pair Of Government Agencies, Demands Release Of Report
That Disputes Claims Made In Mercury News Series

WASHINGTON A lawmaker who has been outspoken about a Mercury News series
implying the CIA helped launch America's crack epidemic denounced federal
government agencies Thursday for their handling of investigations related
to the series.

Rep. Maxine Waters, DLos Angeles, blasted the CIA for leaking conclusions
of its investigation to reporters this week and called for the immediate
release of the CIA probe and a separate Justice Department investigation.
Both reports were scheduled for release this week but were delayed
indefinitely at the Justice Department's urging apparently because they
would compromise an ongoing drug case.

Both Waters and Rep. John Conyers Jr., of Michigan, ranking Democrat on the
House Judiciary Committee, also called for the release of 40,000 pages of
documents relating to the Justice Department inquiry.

The investigations focus on ``Dark Alliance,'' an August 1996 Mercury News
series that documented extensive drug dealings by two Nicaraguans in
SouthCentral Los Angeles in the early 1980s.

The series charged that the Nicaraguans, who had ties to the CIAbacked
Contra rebel forces fighting to overthrow the leftist government in
Nicaragua at the time, used millions of dollars of profits from the drug
deals to help fund the Contras.

It strongly suggested that CIA officials knew of the operation.

The series further alleged that tons of cocaine sold by the Nicaraguans to
a midlevel dealer in SouthCentral Los Angeles was converted to crack,
launching the crack plague that devastated largely AfricanAmerican
neighborhoods in the inner cities across the country.

After a yearlong investigation of itself, the CIA has concluded that it
played no role in launching America's crack epidemic, sources told the
Mercury News on Wednesday.

Rep. Juanita MillenderMcDonald, the Los Angeles congresswoman whose
district includes the inner city area of Watts, said ``the question has
always been . . . whether the CIA could investigate itself and whether the
results of it would be satisfactory to my constituents.''

Waters, an AfricanAmerican whose district covers SouthCentral, said in a
statement that there has been ``a tremendous amount of controversy around
the allegations of drug trafficking by the CIA in black communities'' and
that it was ``critical'' the reports be released.

``The Justice Department is making the sad mistake of attempting to manage
what information it gets out to the public and what information is
delayed,'' Waters said.

Meanwhile, more details of the CIA's investigation emerged Thursday from
sources familiar with the contents of its stillsecret report. If these
sources are correct, the CIA's investigators found nothing to corroborate
any of several key allegations made by the Mercury News series, and the
series was wrong on almost all important counts.

Gary Webb, the reporter who wrote the series, said he was waiting to see
the report to see who investigators talked to and who they didn't talk to,
what reports they looked at and what they didn't look at, and what
questions they asked and what they didn't ask.

Webb resigned from the Mercury News this month.

When the series appeared, it was denounced by thenCIA director John
Deutch, who ordered his inspector general to investigate. Now, the broad
outlines of the CIA inspector general's final report are beginning to emerge.

According to officials familiar with the investigation:

Nothing was found to indicate that the CIA had any dealings or involvement
with Danilo Blandon or Norwin Meneses, the two Nicaraguans linked to the
Contras who the series said introduced cocaine to SouthCentral Los
Angeles. Nor did it find CIA dealings with Ricky Ross, the young
SouthCentral resident who turned the cocaine into crack and developed a
booming business, first in Los Angeles and then in several other cities.

There was no evidence to indicate that CIA personnel directed or condoned
narcotics trafficking into the United States by the Contras.

No evidence indicated the CIA directed or condoned drug trafficking by the
Contras as a means of raising funds to support their activities.

The activities of Ross, Blandon and Meneses appear to have been for
personal gain, and there was nothing to substantiate claims that they were
motivated by any intent to support the Contras or Contra activities
undertaken by the CIA.

No evidence turned up to indicate that the CIA interfered in the criminal
investigations or prosecution of Ross, Blandon or Meneses, as the series
suggested.

A source familiar with the CIA investigation said that only a handful of
witnesses refused to cooperate, and none was in a key position with unique
knowledge.

No one knows whether the 10,000 pages of documents reviewed by the CIA or
the 40,000 pages reviewed by the Justice Department will be disclosed. If
the documents are declassified, it is likely to be through the Freedom of
Information Act process.

Members of the Senate and House intelligence committees have been briefed
on the investigative findings but have not been given the reports. The
House Select Committee on Intelligence will hold at least one public
hearing on the findings, once they are released, officials said.

In a May 11 column examining the series, Mercury News Executive Editor
Jerry Ceppos acknowledged shortcomings in the articles after an extensive
internal reexamination.

``In such complex situations, good journalism requires us . . . to deal in
the `grays,' the ambiguities, of life. I believe that we should have done
better in presenting those gray areas,'' Ceppos wrote. ``There is evidence
to support the specific assertions and conclusions of our series as well
as conflicting evidence on many points.'' He concluded that the series did
not sufficiently include that conflicting evidence and did not meet the
newspaper's standards.