The Dark Alliance

Gary Webb's Incendiary 1996 SJ Mercury News Expos

These articles were downloaded from the web site of the Seattle Times, since the

San Jose Mercury News has removed the entire series from their web site.

Gary Webb's career as a professional journalist was destroyed shortly after

these articles were published. Anyone who challenges the House of Rockefeller

is persona non grata throughout the establishment.

-The Editor

Aug 22, 1996

Cocaine pipeline financed rebels Evidence points to CIA knowing of high-volume drug network

by Gary WebbSan Jose Mercury News

For the better part of a decade, a San Francisco Bay Area drug ring sold tons of cocaine to the Crips

and Bloods street gangs of Los Angeles and funneled millions in drug profits to an arm of the contra

guerrillas of Nicaragua run by the Central Intelligence Agency, the San Jose Mercury News has found.

This drug network opened the first pipeline between Colombia's cocaine cartels and the black

neighborhoods of Los Angeles, a city now known as the "crack" capital of the world. The cocaine that

flooded in helped spark a crack explosion in urban America - and provided the cash and connections

needed for L.A.'s gangs to buy weapons.

It is one of the most bizarre alliances in modern history: the union of a U.S.-backed army attempting to

overthrow a revolutionary socialist government and the "gangstas" of Compton and South-Central Los

Angeles.

The army's financiers - who met with CIA agents before and during the time they were selling the drugs in

L.A. - delivered cut-rate cocaine to the gangs through a young South-Central crack dealer named Ricky

Donnell Ross.

Unaware of his suppliers' military and political connections, "Freeway Rick" turned the cocaine powder

into crack and wholesaled it to gangs across the country.

Drug cash for the contras

Court records show the cash was then used to buy equipment for a guerrilla army named the Fuerza

Democratica Nicaraguense (Nicaraguan Democratic Force) or FDN, the largest of several anti-

communist groups commonly called the contras.

While the FDN's war is barely a memory today, black America is still dealing with its poisonous side

effects. Urban neighborhoods are grappling with legions of homeless crack addicts. Thousands of young

black men are serving long prison sentences for selling cocaine - a drug that was virtually unobtainable in

black neighborhoods before members of the CIA's army brought it into South-Central in the 1980s atbargain-basement prices.

And the L.A. gangs, which used their enormous cocaine profits to arm themselves and spread crackacross the country, are still thriving.

"There is a saying that the ends justify the means," former FDN leader and drug dealer Oscar Danilo

Blandon Reyes testified during a recent cocaine-trafficking trial in San Diego. "And that's what Mr.Bermudez (the CIA agent who commanded the FDN) told us in Honduras, OK? So we started raising

money for the contra revolution."

Recently declassified reports, federal court testimony, undercover tapes, court records here and abroadand hundreds of hours of interviews over the past 12 months leave no doubt that Blandon was no ordinary

drug dealer.

Shortly before Blandon - who had been the drug ring's Southern California distributor - took the stand inSan Diego as a witness for the U.S. Department of Justice, federal prosecutors obtained a court orderpreventing defense lawyers from delving into his ties to the CIA.

Blandon, one of the FDN's founders in California, "will admit that he was a large-scale dealer in cocaine,

and there is no additional benefit to any defendant to inquire as to the Central Intelligence Agency,"Assistant U.S. Attorney L.J. O'Neale argued in his motion shortly before Ross' trial on cocaine-trafficking

charges in March.

The 5,000-man FDN, records show, was created in mid-1981 when the CIA combined several existinggroups of anti-communist exiles into a unified force it hoped would topple the new socialist government of

Nicaragua.

Waged a losing war

From 1982 to 1988, the FDN - run by both American and Nicaraguan CIA agents - waged a losing waragainst Nicaragua's Sandinista government, the Cuban-supported socialists who'd overthrown U.S.-

backed dictator Anastasio Somoza in 1979.

Blandon, who began working for the FDN's drug operation in late 1981, testified that the drug ring soldalmost a ton of cocaine in the United States that year - $54 million worth at prevailing wholesale prices. It

was not clear how much of the money found its way back to the CIA's army, but Blandon testified that

"whatever we were running in L.A., the profit was going for the contra revolution."

At the time of that testimony, Blandon was a full-time informant for the Drug Enforcement Administration,a job the U.S. Department of Justice got him after releasing him from prison in 1994.

Though Blandon admitted to crimes that have sent others away for life, the Justice Department turned him

loose on unsupervised probation after only 28 months behind bars and has paid him more than $166,000since, court records show.

"He has been extraordinarily helpful," federal prosecutor O'Neale told Blandon's judge in a plea for the

trafficker's release in 1994. Though O'Neale once described Blandon to a grand jury as "the biggestNicaraguan cocaine dealer in the United States," the prosecutor would not discuss him with the Mercury

News.

Blandon's boss in the FDN's cocaine operation, Juan Norwin Meneses Cantarero, has never spent a dayin a U.S. prison, even though the federal government has been aware of his cocaine dealings since at least

1974, records show.

Meneses - who ran the drug ring from his homes in the Bay Area - is listed in the DEA's computers as amajor international drug smuggler and was implicated in 45 separate federal investigations. Yet he and his

cocaine-dealing relatives lived quite openly in the Bay Area for years, buying homes, bars, restaurants, carlots and factories.

"I even drove my own cars, registered in my name," Meneses said during a recent interview in Nicaragua.

Meneses' organization was "the target of unsuccessful investigative attempts for many years," O'Nealeacknowledged in a 1994 affidavit. But records and interviews revealed that a number of those probes

were stymied not by the elusive Meneses but by agencies of the U.S. government.

CIA hampered probes

Agents from four organizations - the DEA, U.S. Customs, the Los Angeles County Sheriff's Departmentand the California Bureau of Narcotic Enforcement - have complained that investigations were hampered

by the CIA or unnamed "national-security" interests.

One 1988 investigation by a U.S. Senate subcommittee ran into a wall of official secrecy at the JusticeDepartment.

In that case, congressional records show, Senate investigators were trying to determine why the U.S.

attorney in San Francisco, Joseph Russoniello, had given $36,000 back to a Nicaraguan cocaine dealer

arrested by the FBI.

The money was returned, court records show, after two contra leaders sent letters to the court swearing

that the drug dealer had been given the cash to buy weapons for guerrillas.

After Nicaraguan police arrested Meneses on cocaine charges in Managua in 1991, his judge expressed

astonishment that the infamous smuggler went unmolested by American drug agents during his years in the

United States.

His seeming invulnerability amazed American authorities as well.

A Customs agent who investigated Meneses in 1980 before transferring elsewhere said he was reassigned

to San Francisco seven years later "and I was sitting in some meetings and here's Meneses' name again.

And I can remember thinking, `Holy cow, is this guy still around?' "

Blandon led an equally charmed life. For at least five years he brokered massive amounts of cocaine to the

black gangs of Los Angeles without being arrested. But his luck changed overnight.

On Oct. 27, 1986, agents from the FBI, the IRS, local police and the Los Angeles County sheriff fanned

out across Southern California and raided more than a dozen locations connected to Blandon's cocaine

operation. Blandon and his wife, along with numerous Nicaraguan associates, were arrested on drug and

weapons charges.

The search-warrant affidavit reveals that local drug agents knew plenty about Blandon's involvement with

cocaine and the CIA's army nearly 10 years ago.

"Danilo Blandon is in charge of a sophisticated cocaine smuggling and distribution organization operating in

Southern California," L.A. County sheriff's Sgt. Tom Gordon said in the 1986 affidavit. "The monies

gained from the sales of cocaine are transported to Florida and laundered through Orlando Murillo, who isa high-ranking officer of a chain of banks in Florida named Government Securities Corporation. From this

bank the monies are filtered to the contra rebels to buy arms in the war in Nicaragua."

Raids a spectacular failure

Despite their intimate knowledge of Blandon's operations, the police raids were a spectacular failure.

Every location had been cleaned of anything remotely incriminating. No one was ever prosecuted.

Ron Spear, a spokesman for Los Angeles County Sheriff Sherman Block, said Blandon somehow knew

that he was under police surveillance.

FBI records show that soon after the raids, Blandon's defense attorney, Bradley Brunon, called thesheriff's department to suggest that his client's troubles stemmed from a most unlikely source: a recent

congressional vote authorizing $100 million in military aid to the contras.

According to a December 1986 FBI teletype, Brunon told the officers that the "CIA winked at this sort ofthing. . . . (Brunon) indicated that now that U.S. Congress had voted funds for the Nicaraguan contra

movement, U.S. government now appears to be turning against organizations like this."

That FBI report, part of the files of former Iran-contra special prosecutor Lawrence Walsh, was madepublic only last year, when it was released by the National Archives at the San Jose Mercury News'

request.

Blandon has also implied that his cocaine sales were, for a time, CIA-approved. He told a San Franciscofederal grand jury in 1994 that once the FDN began receiving American taxpayer dollars, the CIA no

longer needed his kind of help.

None of the government agencies known to have been involved with Meneses and Blandon would

provide the Mercury News with any information about them, despite Freedom of Information Act

requests.

Blandon's lawyer, Brunon, said in an interview that his client never told him directly that he was selling

cocaine for the CIA, but the prominent Los Angeles defense attorney drew his own conclusions from the

"atmosphere of CIA and clandestine activities" that surrounded Blandon and his Nicaraguan friends.

"Was he involved with the CIA? Probably. Was he involved with drugs? Most definitely," Brunon said.

"Were those two things involved with each other? They've never said that, obviously. They've never

admitted that. But I don't know where these guys get these big aircraft."

That very topic arose during the sensational 1992 cocaine-trafficking trial of Meneses after he was

arrested in Nicaragua in connection with a staggering 750-kilo shipment of cocaine. His chief accuser washis friend Enrique Miranda, a relative and former Nicaraguan military intelligence officer who had been

Meneses' emissary to the cocaine cartel of Bogota, Colombia. Miranda pleaded guilty to drug charges

and agreed to cooperate in exchange for a seven-year sentence.

In a long, handwritten statement he read to Meneses' jury, Miranda revealed the deepest secrets of the

Meneses drug ring, earning his old boss a 30-year prison sentence in the process.

"He (Norwin) and his brother Luis Enrique had financed the contra revolution with the benefits of thecocaine they sold," Miranda wrote. "This operation, as Norwin told me, was executed with the

collaboration of high-ranking Salvadoran military personnel. They met with officials of the Salvadoran air

force, who flew (planes) to Colombia and then left for the U.S., bound for an Air Force base in Texas, as

he told me."

Meneses - who has close personal and business ties to a Salvadoran air-force commander and former

CIA agent named Marcos Aguado - declined to discuss Miranda's statements during an interview at a

prison outside Managua in January. He is scheduled to be paroled this summer, after nearly five years incustody.

U.S. General Accounting Office records confirm that El Salvador's air force was supplying the CIA's

Nicaraguan guerrillas with aircraft and flight support services throughout the mid-1980s.

The same day the Mercury News requested official permission to interview Miranda, he disappeared.

While out on a routine weekend furlough, Miranda failed to return to the Nicaraguan jail where he'd beenliving since 1992. Though his jailers, who described him as a model prisoner, claimed Miranda had

escaped, they didn't call the police until a Mercury News correspondent showed up and discovered he

was gone.

He has not been seen in nearly a year.

Aug 22, 1996

Salvador air force linked to cocaine flights, Nicaraguan

contras, drug dealer's supplier

by Gary Webb

San Jose Mercury News

One thing is certain: There is considerable evidence that El Salvador's air force was deeply involved

with cocaine flights, the contras and drug dealer Oscar Danilo Blandon Reyes' cocaine supplier, Norwin

Meneses.

Meneses said one of his oldest friends is a former contra pilot named Marcos Aguado, a Nicaraguan who

works for the Salvadoran air-force high command.

Aguado was identified in 1987 congressional testimony as a CIA agent who helped the contras get

weapons, airplanes and money from a major Colombian drug trafficker named George Morales. Aguado

admitted his role in that deal in a videotaped deposition taken by a U.S. Senate subcommittee that year.

His name also turned up in a deposition taken by the congressional Iran-contra committees that same

year. Robert Owen, a courier for Lt. Col. Oliver North, testified he knew Aguado as a contra pilot and

said there was "concern" about his being involved with drug trafficking.

While flying for the contras, Aguado was stationed at Ilopango Air Base near El Salvador's capital.

In 1985, the DEA agent assigned to El Salvador - Celerino Castillo III - began picking up reports that

cocaine was being flown to the United States out of hangars 4 and 5 at Ilopango as part of a contra-related covert operation. Castillo said he soon confirmed what his informants were telling him.

Starting in January 1986, Castillo began documenting the cocaine flights - listing pilot names, tail numbers,

dates and flight plans - and sent them to DEA headquarters.

The only response he got, Castillo wrote in his 1994 memoirs, was an internal DEA investigation of him.He took a disability retirement from the agency in 1991.

"Basically, the bottom line is it was a covert operation and they (DEA officials) were covering it up,"

Castillo said in an interview. "You can't get any simpler than that. It was a cover-up."

Aug 22, 1996

Trio created mass market in U.S. for crack cocaine

by Gary Webb

San Jose Mercury News

If they'd been in a more respectable line of work, Norwin Meneses, Oscar Danilo Blandon Reyes and

"Freeway Rick" Ross would have been hailed as geniuses of marketing.

This odd trio - a smuggler, a bureaucrat and a ghetto teenager - made fortunes creating the first mass

market in America for a product so hellishly desirable that consumers will literally kill to get it: "crack"cocaine.

Federal lawmen will tell you plenty about Rick Ross, mostly about the evils he visited upon black

neighborhoods by spreading the crack plague in Los Angeles and cities as far east as Cincinnati.

Tomorrow, they hope, Freeway Rick will be sentenced to life in prison without the possibility of parole.

But those same officials won't say a word about the two men who turned Rick Ross into L.A.'s first kingof crack, the men who, for at least five years, supplied him with enough Colombian cocaine to help spawn

crack markets in major cities nationwide. Their critical role in the country's crack explosion has been a

strictly guarded secret.

To understand how crack came to curse black America, you have to go into the volcanic hills overlooking

Managua, the capital of the Republic of Nicaragua.

Biggest military upset

During June 1979, those hills teemed with triumphant guerrillas called Sandinistas - Cuban-assisted

revolutionaries who had just pulled off one of the biggest military upsets in Central American history. In a

bloody civil war, they'd destroyed the U.S.-trained army of Nicaragua's dictator, Anastasio Somoza.

In the dictator's doomed capital, a minor member of Somoza's government decided to skip the war's

obvious ending. On June 19, Oscar Danilo Blandon Reyes gathered his wife and young daughter and flew

into exile in California.

Today, Blandon is a well-paid and highly trusted operative for the U.S. Drug Enforcement Administration.

Federal officials say he is one of the DEA's top informants in Latin America, collecting intelligence on

Colombian and Mexican drug lords and setting up stings.

In March, he was the DEA's star witness at a drug trial in San Diego, where, for the first time, he testified

publicly about his strange interlude between government jobs: the years he sold cocaine to the street gangs

of black Los Angeles.

Blandon swore that he didn't plan on becoming a dope dealer when he landed in the United States with

$100 in his pocket, seeking political asylum. He did it, he insisted, out of patriotism.

When duty called in late 1981, he was working as a car salesman in East Los Angeles. In his spare time,

he said, he and a few fellow exiles were working to rebuild Somoza's defeated army, the Nicaraguan

national guard, in hopes of one day returning to Managua in triumph.

But the rallies and cocktail parties the exiles hosted raised little money. "At this point, he became

committed to raising money for humanitarian and political reasons via illegal activity (cocaine trafficking for

profit)," said a heavily censored parole report, which surfaced during the March trial.

That venture began, Blandon testified, with a phone call from a wealthy college friend in Miami.

Blandon said his college chum, who also was working in the resistance movement, dispatched him to LosAngeles International Airport to pick up another exile, Juan Norwin Meneses Cantarero. Though their

families were related, Blandon said, he'd never met Meneses until that day.

"I picked him up, and he started telling me that we had to (raise) some money and to send to Honduras,"

Blandon testified. He said he flew with Meneses to a camp there and met one of his new companion's old

friends, Col. Enrique Bermudez.

Bermudez - who'd been Somoza's Washington liaison to the American military - was hired by the Central

Intelligence Agency in mid-1980 to pull together the remnants of Somoza's vanquished national guard,records show. In August 1981, Bermudez's efforts were unveiled at a news conference as the Fuerza

Democratica Nicaraguense (FDN) - in English, the Nicaraguan Democratic Force. It was the largest and

best-organized of the handful of guerrilla groups known as the contras.

Bermudez was the FDN's military chief and, according to congressional records and newspaper reports,

received regular CIA paychecks for a decade, payments that stopped shortly before his still-unsolved

slaying in Managua in 1991.

Reagan OKs covert operations

White House records show that shortly before Blandon's meeting with Bermudez, President Reagan had

given the CIA the green light to begin covert paramilitary operations against the Sandinista government.

But Reagan's secret Dec. 1, 1981, order permitted the spy agency to spend only $19.9 million on the

project, an amount CIA officials acknowledged was not nearly enough to field a credible fighting force.

After meeting with Bermudez, Blandon testified, he and Meneses "started raising money for the contrarevolution."

While Blandon says Bermudez didn't know cocaine would be the fund-raising device they used, the

presence of the mysterious Mr. Meneses strongly suggests otherwise.

Norwin Meneses, known in Nicaraguan newspapers as "Rey de la Droga" (King of Drugs), was then

under active investigation by the DEA and the FBI for smuggling cocaine into the United States, recordsshow.

And Bermudez was very familiar with the influential Meneses family. He had served under two Meneses

brothers, Fermin and Edmundo, who were generals in Somoza's army.

Despite a stack of law-enforcement reports describing him as a major drug trafficker, Norwin Meneses

was welcomed into the United States in July 1979 as a political refugee and given a visa and a work

permit. He settled in the San Francisco Bay Area, and for the next six years supervised the importation ofthousands of kilos of cocaine into California.

At the meeting with Bermudez, Meneses said in a recent interview, the contra commander put him in

charge of "intelligence and security" for the FDN in California.

Blandon, he said, was assigned to raise money in Los Angeles.

Blandon said Meneses gave him two kilograms of cocaine (roughly 4 1/2 pounds) and sent him to LosAngeles.

"Meneses was pushing me every week," he testified. "It took me about three months, four months to sell

those two keys because I didn't know what to do. . . ."

To find customers, Blandon and several other Nicaraguan exiles working with him headed for the vast,

untapped markets of L.A.'s black ghettos.

Blandon's marketing strategy, selling the world's most expensive street drug in some of California's

poorest neighborhoods, might seem baffling, but in retrospect, his timing was uncanny. He and hiscompatriots arrived in South-Central L.A. right when street-level drug users were figuring out how to

make cocaine affordable: by changing the pricey white powder into powerful little nuggets that could be

smoked - crack.

Emergence of crack

Crack turned the cocaine world on its head. Cocaine smokers got an explosive high unmatched by 10

times as much snorted powder. And since only a tiny amount was needed for that rush, cocaine no longerhad to be sold in large, expensive quantities. Anyone with $20 could get wasted.

It was a "substance that is tailor-made to addict people," Dr. Robert Byck, a Yale University cocaine

expert, said during congressional testimony in 1986. "It is as though (McDonald's founder) Ray Kroc had

invented the opium den."

Crack's Kroc was a disillusioned 19-year-old named Ricky Donnell Ross, who, at the dawn of the

1980s, found himself adrift on the streets of South-Central Los Angeles.

A talented tennis player for Dorsey High School, Ross had recently seen his dream of a college

scholarship evaporate when his coach discovered he could neither read nor write.

A friend of Ross' - a college football player home at Christmas from San Jose State University - told him

"cocaine was going to be the new thing, that everybody was doing it." Intrigued, Ross set off to find out

more.

Through a cocaine-using auto-upholstery teacher Ross knew, he met a Nicaraguan named Henry

Corrales, who began selling Ross and a friend , Ollie "Big Loc" Newell, small amounts of remarkably

inexpensive cocaine.

Thanks to a network of friends in South-Central L.A. and Compton, including many members of various

Crips gangs, the pair steadily built up clientele. With each sale, Ross reinvested his hefty profits in more

cocaine.

Eventually, Corrales introduced Ross and Newell to his supplier, Blandon. And then business really

picked up.

"At first, we was just going to do it until we made $5,000," Ross said. "We made that so fast we said, no,

we'll quit when we make $20,000. Then we was going to quit when we saved enough to buy a house . . ."

Ross would eventually own millions of dollars' worth of real estate across Southern California, includinghouses, motels, a theater and several other businesses. (His nickname, "Freeway Rick," came from the

fact that he owned properties near the Harbor Freeway in Los Angeles.)

Within a year, Ross' drug operation grew to dominate inner-city Los Angeles, and many of the biggest

dealers in town were his customers. When crack hit L.A.'s streets hard in late 1983, Ross already had the

infrastructure in place to corner a huge chunk of the burgeoning market.

It was not uncommon, he said, to move $2 million or $3 million worth of crack in one day.

"Our biggest problem had got to be counting the money," Ross said. "We got to the point where it was

like, man, we don't want to count no more money."

Nicaraguan cocaine dealer Jacinto Torres, another former supplier of Ross and a sometime-partner of

Blandon, told drug agents in a 1992 interview that after a slow start, "Blandon's cocaine business

dramatically increased. . . . Norwin Meneses, Blandon's supplier as of 1983 and 1984, routinely flew

quantities of 200 to 400 kilograms from Miami to the West Coast."

Blandon told the DEA last year that he was selling Ross up to 100 kilos of cocaine a week, which was

then "rocked up" and distributed "to the major gangs in the area, specifically the Crips and the Bloods,"

the DEA report said.

At wholesale prices, that's roughly $65 million to $130 million worth of cocaine every year, depending on

the going price of a kilo.

"He was one of the main distributors down here," said former Los Angeles Police Department narcoticsdetective Steve Polak, who was part of the Freeway Rick Task Force, which was set up in 1987 to put

Ross out of business. "And his poison, there's no telling how many tens of thousands of people he

touched. He's responsible for a major cancer that still hasn't stopped spreading."

But Ross is the first to admit that being in the right place at the right time had almost nothing to do with his

amazing success. Other L.A. dealers, he noted, were selling crack long before he started.

What he had, and they didn't, was Blandon, a friend with a seemingly inexhaustible supply of high-grade

cocaine and an expert's knowledge of how to market it.

"I'm not saying I wouldn't have been a dope dealer without Danilo," Ross stressed. "But I wouldn't have

been Freeway Rick."

The secret to his success, Ross said, was Blandon's cocaine prices. "It was unreal. We were just wiping

out everybody."

"It didn't make no difference to Rick what anyone else was selling it for. Rick would just go in and

undercut him $10,000 a key," Chico Brown said. "Say some dude was selling for 30. Boom - Rick would

go in and sell it for 20. If he was selling for 20, Rick would sell for 10. Sometimes, he be giving (it) away."

Ross said he never discovered how Blandon was able to get cocaine so cheaply. "I just figured he knew

the people, you know what I'm saying? He was plugged."

But Freeway Rick had no idea just how "plugged" his erudite cocaine broker was. He didn't know about

Meneses, or the CIA, or the Salvadoran air-force planes that allegedly were flying the cocaine into an air

base in Texas.

And he wouldn't find out about it for another 10 years.

Aug 22, 1996

Crack was born during 1974 in S.F. Bay Area

by Gary Webb

San Jose Mercury News

Though Miami and Los Angeles are commonly regarded as the twin cradles of crack, the first

government-financed study of cocaine smoking concluded that it was actually born in the Bay Area in

January 1974.

After comedian Richard Pryor nearly immolated himself during a cocaine-smoking binge in 1980, theNational Institute on Drug Abuse hired UCLA drug expert Ronald Siegel to look into the then-unfamiliar

practice.

Siegel, the first scientist to document crack's use in the United States, traced the smoking habit back to

1930, when Colombians first started it.

But what was being smoked south of the border - a paste-like substance called BASE (bah-SAY) - wasvery different from what Californians were putting in their pipes, Siegel found, even though they called it

the same thing: free base.

BASE was a crude, toxics-laden precursor to cocaine powder. On the other hand, free base (which later

became known as crack or rock) was cocaine powder that had been reverse-engineered to make it

smokable.

When San Francisco Bay Area dealers tried recreating the drug they'd seen in South America, Siegellearned, they'd screwed up.

"When they looked it up in the Merck Manual, they saw cocaine base and thought, well, yeah, this is it,"

Siegel, a nationally known drug researcher, said. "They mispronounced it, misunderstood the Spanish, and

thought (BASE) was cocaine base."

The base described in the organic-chemistry handbook was cocaine powder separated from its salts, a

process easily done with boiling water and baking soda.

It was an immediate, if unintentional, hit.

"They were wowed by it," Siegel said. "They thought they were smoking BASE. They were not. They

were smoking something nobody on the planet had ever smoked before."

Using the sales records of several major drug-paraphernalia companies, Siegel correlated crack's public

appearance with the appearance of base-making kits and glass pipes for smoking it. The sales records

zeroed in on the Bay Area.

"We were able to show to our satisfaction that they were directly responsible for distributing the habit

throughout the United States," Siegel said.

"Wherever they were selling their kits, that's where we started getting the clinical reports. It all started inNorthern California."

His groundbreaking study was never published by the government, purportedly for budgetary reasons.

Siegel, who said he grew concerned that the information would not be made available to otherresearchers, published it himself in an obscure medical journal in late 1982.

Aug 23, 1996

Drug king free, but black aide sits in jail How cheap cocaine became the scourge of the inner city

by Gary WebbSan Jose Mercury News

For the past 1 1/2 years, the U.S. Department of Justice has been trying to explain why nearly everyoneconvicted in California's federal courts of "crack" cocaine trafficking is black.

Critics, including some federal-court judges, say it looks like the Justice Department is targeting crackdealers by race, which would be a violation of the Constitution.

Federal prosecutors, however, say there's a simple, if unpleasant, reason for the lopsided statistics: Most

crack dealers are black.

But why - of all the ethnic and racial groups in California to pick from - crack planted its deadly roots in

L.A.'s black neighborhoods is something Oscar Danilo Blandon Reyes may be able to answer.

Blandon is the Johnny Appleseed of crack in California - the Crips' and Bloods' first direct connect to the

cocaine cartels of Colombia. The tons of cut-rate cocaine he brought into black L.A. during the 1980sand early 1990s became millions of rocks of crack, which spawned new markets wherever they landed.

On a tape made by the Drug Enforcement Administration in July 1990, Blandon casually explained the

flood of cocaine that coursed through the streets of South-Central Los Angeles during the previousdecade.

"These people have been working with me 10 years," Blandon said. "I've sold them about 2,000 or 4,000(kilos). I don't know. I don't remember how many."

"It ain't that Japanese guy you were talking about, is it?" asked DEA informant John Arman, who was

wearing a hidden transmitter.

"No, it's not him," Blandon insisted. "These . . . these are the black people."

Arman gasped. "Black?!"

"Yeah," Blandon said. "They control L.A. The people (black cocaine dealers) that control L.A."

But unlike the thousands of young blacks now serving long federal prison sentences for selling merehandfuls of the drug, Blandon is a free man today. He has a spacious new home in Nicaragua and a

business exporting precious woods, courtesy of the U.S. government, which has paid him more than$166,000 over the past 18 months, records show - for his help in the war on drugs.

That turn of events both amuses and angers "Freeway Rick" Ross, L.A.'s premier crack wholesaler duringmuch of the 1980s and Blandon's biggest customer.

"They say I sold dope everywhere, but, man, I know he done sold 10 times more dope than me," Ross

said during a recent interview.

Nothing epitomizes the drug war's uneven impact on black Americans more clearly than the intertwined

lives of Ricky Donnell Ross, a high-school dropout, and his suave cocaine supplier, Blandon, who has amaster's degree in marketing and was one of the top civilian leaders in California of an anti-communistguerrilla army formed by the U.S. Central Intelligence Agency. Called the Fuerza Democratica

Nicaraguense (FDN), it became known to most Americans as the contras.

In recent court testimony, Blandon, who began dealing cocaine in South-Central L.A. in 1982, swore that

the first kilo of cocaine he sold in California was to raise money for the CIA's army, which was trying on ashoestring to unseat Nicaragua's new socialist Sandinista government.

After Blandon crossed paths with Ross, a South-Central teenager with gang connections and street smarts

necessary to move the army's cocaine, a blizzard engulfed the ghettos.

Former Los Angeles police narcotics detective Stephen Polak said he was working the streets of South-

Central in the mid-1980s when he and his partners began seeing more cocaine than ever before.

"A lot of detectives, a lot of cops, were saying, `hey, these blacks, no longer are we just seeing gram

dealers. These guys are doing ounces; they were doing keys,' " Polak recalled. But he said the reportswere disregarded by higher-ups who couldn't believe black neighborhoods could afford the amount ofcocaine the street cops claimed to be seeing.

"Major Violators (the LAPD's elite anti-drug unit) was saying, basically, `ahh, South-Central, how muchcould they be dealing?' " said Polak. "Well, they (black dealers) went virtually untouched for a long time."

It wasn't until January 1987 - when crack markets were popping up in major cities all over the nation -that law-enforcement brass decided to confront L.A.'s crack problem head-on. They formed the FreewayRick Task Force, a cadre of veteran drug agents whose sole mission was to put Rick Ross out of

business. Polak was a charter member.

"We just dedicated seven days a week to him. We were just on him at every move," Polak said.

Ross, as usual, was quick to spot a trend. He moved to Cincinnati and quietly settled into a woodsy,

suburban home.

"I called it cooling out, trying to back away from the game," Ross said. "I had enough money."

His longtime supplier, Blandon, reached the same conclusion about the same time. He moved to Miami

with $1.6 million in cash and invested in several businesses.

But neither Ross nor Blandon stayed "retired" for long.

A manic deal-maker, Ross found Cincinnati's virgin crack market too seductive to ignore.

Plunging back in, the crack tycoon cornered the Cincinnati market using the same low-price, high-volumestrategy - and the same Nicaraguan drug connections - he'd used in L.A. Soon, he also was selling crack

in Cleveland, Indianapolis, Dayton and St. Louis.

"There's no doubt in my mind crack in Cincinnati can be traced to Ross," police officer Robert Enoch told

a Cincinnati newspaper three years ago.

But Ross' reign in the Midwest was short-lived. In 1988, one of his loads ran into a drug-sniffing dog at aNew Mexico bus station, and drug agents eventually connected it to Ross. He pleaded guilty to crack

trafficking charges and received a mandatory 10-year prison sentence, which he began serving in 1990.

In Miami, Blandon's retirement plans also had gone awry as his business ventures collapsed.

He returned to the San Francisco Bay Area and began brokering cocaine again, buying and selling fromthe Nicaraguan dealers he'd known in his days with the FDN. In 1990 and 1991, he testified, he soldabout 425 kilos of cocaine in Northern California - $10.5 million worth at wholesale prices.

But unlike before, when he was selling cocaine for the contras, Blandon was constantly dogged by thepolice.

Twice in six months he was detained, first by Customs agents while taking $117,000 in money orders toTijuana to pay a supplier, and then by the LAPD when he was in the act of paying one of his Colombian

suppliers more than $350,000.

The second time, after police found $14,000 in cash and a small quantity of cocaine in his pocket, he wasarrested. But the U.S. Justice Department - saying a prosecution would disrupt an active investigation -

persuaded the police to drop their money-laundering case.

Soon after that, Blandon and his wife, Chepita, were arrested by DEA agents on charges of conspiracy to

distribute cocaine. They were jailed without bond as dangers to the community, and several otherNicaraguans also were arrested.

The prosecutor, L.J. O'Neale, told a federal judge that Blandon had sold so much cocaine in the United

States his mandatory prison sentence was "off the scale."

Then Blandon "just vanished," said Juanita Brooks, a San Diego attorney who represented one of

Blandon's co-defendants. "All of a sudden his wife was out of jail and he was out of the case."

The reasons were contained in a secret Justice Department memorandum filed in San Diego federal court

in late 1993.

Blandon, prosecutor O'Neale wrote, had become "valuable in major DEA investigations of Class I drugtraffickers." And even though probation officers were recommending a life sentence and a $4 million fine,

O'Neale said the government would be satisfied if Blandon got 48 months and no fine. Motion granted.

Less than a year later, records show, O'Neale was back with another idea: Why not just let Blandon go?

After all, he wrote the judge, Blandon had a federal job waiting.

O'Neale, saying that Blandon "has almost unlimited potential to assist the United States," said thegovernment wanted "to enlist Mr. Blandon as a full-time, paid informant after his release from prison."

After only 28 months in custody, most of it spent with federal agents who debriefed him for "hundreds ofhours," he said, Blandon walked out of the Metropolitan Correctional Center in San Diego, was given a

green card and began working on his first assignment: setting up his old friend, "Freeway Rick," for a sting.

Records show Ross was still behind bars, awaiting parole, when San Diego DEA agents targeted him.

Soon after Ross went to prison for the Cincinnati bust, federal prosecutors offered him a deal. His term

would be shortened by five years in return for testimony in a federal case against Los Angeles CountySheriff's detectives that included members of the old Freeway Rick Task Force.

Within days of Ross' parole in October 1994, he and Blandon were back in touch, and their conversationquickly turned to cocaine.

According to tapes Blandon made of some of their discussions, Ross repeatedly told Blandon that he was

broke and couldn't afford to finance a drug deal. But Ross did agree to help his old mentor, who was alsopleading poverty, find someone else to buy the 100 kilos of cocaine Blandon claimed he had.

On March 2, 1995, in a shopping-center parking lot in National City, near San Diego, Ross poked hishead inside a cocaine-laden Chevy Blazer, and the place exploded with police.

Ross jumped into a friend's pickup and zoomed off "looking for a wall that I could crash myself into," he

said. "I just wanted to die." He was captured after the truck careened into a hedgerow. He has been heldin jail without bond since then.

Ross' arrest netted Blandon $45,500 in government rewards and expenses, records show. On thestrength of Blandon's testimony, Ross and two other men were convicted of cocaine-conspiracy charges

in San Diego last March - conspiring to sell the DEA's cocaine. Sentencing was set for today. Ross isfacing a life sentence without the possibility of parole. The other men are looking at 10- to 20-yearsentences.

Acquaintances say Blandon, who refused repeated interview requests, is a common sight these days inManagua's better restaurants, drinking with friends and telling of his "escape" from U.S. authorities.

According to his Miami lawyer, Blandon spends most of his time shuttling between San Diego and

Managua, trying to recover Nicaraguan properties seized in 1979, when the Sandinistas took power.

Aug 23, 1996

Cocaine sentences weighted against blacks

by Gary WebbSan Jose Mercury News

When it comes to cocaine, it isn't just a suspicion that the war on drugs is hammering blacks harderthan whites. According to the U.S. Justice Department, it's a fact.

The "main reason" cocaine sentences for blacks are longer than for whites, the Bureau of Justice Statistics

reported in 1993, is that 83 percent of the people being sent to prison for "crack" trafficking are black"and the average sentence imposed for crack trafficking was twice as long as for trafficking in powdered

cocaine."

Even though crack and powder cocaine are the same drug, you have to sell more than six pounds of

powder before you face the same jail time as someone who sells one ounce of crack - a 100-to-1 ratio.

That logic has eluded Dr. Robert Byck, a Yale University drug expert, from the moment he discovered the100-to-1 ratio may have been his inadvertent doing.

In 1986, at the height of an election-year hysteria over crack, Byck was summoned before a U.S. Senatecommittee to tell what he knew about cocaine smoking.

Byck, a renowned scientist who edited and published Sigmund Freud's cocaine papers, had been studyingcrack smoking in South America for nearly 10 years, with growing alarm.

Sen. Lawton Chiles, a Florida Democrat (and now that state's governor), was pushing for tougher crack

laws, and he asked Byck about testimony he had given previously that "some experts" believed crack was50 times more addictive than powder cocaine. Byck acknowledged some people believed that.

Despite the speculative nature of the figure, Byck said, the addictive factor of 50 was "doubled by peoplewho wanted to get tough on cocaine" and then, for reasons he still finds incomprehensible, turned into ameasurement of weight.

The resultant 100-to-1 (powder-vs.-crack) weight ratio, Byck said, was "a fabrication by whoever wrotethe law, but not reality. . . . You can't make a number."

Recently, the U.S. Sentencing Commission - a panel of experts created by Congress to be its unbiasedadviser in these matters - tried and failed to find a better reason to explain why powder dealers must sell100 times more cocaine before they get the same mandatory sentence as crack dealers.

The "absence of comprehensive data substantiating this legislative policy is troublesome," it reported lastyear.

In 1993, cocaine smokers got an average sentence of nearly three years. People who snorted cocainepowder received a little over three months. Nearly all of the long sentences went to blacks, the

commission found.

Justice Department researchers estimated that if crack and powder sentences were made equal, "theblack-white difference . . . would not only evaporate but would slightly reverse."

Based on such findings, the commission recommended in May 1995 that the cocaine-sentencing laws beequalized, calling the 100-to-1 ratio "a primary cause of the growing disparity between sentences for

black and white federal defendants."

Apparently fearful of being seen as soft on drugs, Congress voted overwhelmingly last year to keep thecrack laws the same. On Oct. 30, President Clinton signed the bill rejecting the commission's

recommendations.

Oct. 3, 1996

Affidafit shows CIA knew of contra drug ring

by Gary Webb and Pamela KramerKnight-Ridder Newspapers

LOS ANGELES - During the early 1980s, federal and local narcotics agents knew that a massive drugring operated by Nicaraguan contra rebels was selling large amounts of cocaine "mainly to blacks living in

the South Central Los Angeles area," according to a search-warrant affidavit obtained by the San JoseMercury News.

The Oct. 23, 1986, affidavit identifies former Nicaraguan government official Danilo Blandon as "the

highest-ranking member of this organization" and describes a sprawling drug operation involving more than100 Nicaraguan contra sympathizers.

The affidavit of Thomas Gordon, a former Los Angeles County sheriff's narcotics detective, is the firstindependent corroboration that the contra army - the Nicaraguan Democratic Force - was dealing "crack"

cocaine to gangs in Los Angeles' black neighborhoods. Known by its Spanish initials, the FDN was ananti-communist commando group formed and run by the CIA during the 1980s.

Gordon's sworn statement says that both the Drug Enforcement Administration and the FBI had

informants inside the Blandon drug ring for several years before sheriff's deputies raided it Oct. 27, 1986.Gordon's affidavit is based on police interviews with those informants and one of the DEA agents who

was investigating Blandon.

Twice during the past year, Ron Spear, Los Angeles County Sheriff's Department spokesman, told theMercury News that his department had no records of the 1986 raids and denied having a copy of

Gordon's search-warrant affidavit.

The Mercury News obtained the entire search-warrant affidavit this week. Sheriff Sherman Block's office

did not respond yesterday to written questions about the affidavit.

A recent Mercury News series revealed how Blandon's operation, which sold thousands of kilos of

cocaine to black Los Angeles drug dealers, created the first mass market for crack in America during theearly 1980s and helped fuel a crack explosion that is still reverberating through black communities. Boththe CIA and the Justice Department have denied government involvement.

But according to a legal motion filed in a 1990 case involving a deputy who helped execute the searchwarrants, one of the suspects involved in the raid identified himself as a CIA agent and asked police to call

CIA headquarters in Virginia to confirm his identity. The motion, filed by Los Angeles defense attorneyHarlan Braun on behalf of Deputy Daniel Garner, said the narcotics detectives allowed the man to make

the call but then carted away numerous documents purportedly linking the U.S. government to cocainetrafficking and money-laundering efforts on behalf of the contras.

The motion said CIA agents appeared at the sheriff's department within 48 hours of the raid and removed

the seized files from the evidence room. But Braun said detectives secretly copied 10 pages before thedocuments were spirited away. Braun attempted to introduce them in the 1990 criminal trial to force the

federal government to back off the case. Braun was hit with a gag order, the documents were put underseal and Garner was convicted of corruption charges.

Internal sheriff's department records of the raid "mysteriously disappeared" around the same time the

seized files were taken, Braun's motion said. That claim was buttressed in an interview this week by anofficer involved in the raid.

The officer, who requested anonymity, said the alleged CIA agent was Ronald Lister, a former LagunaBeach police detective who worked with Blandon in the drug ring. The 1986 search-warrant affidavit

identifies Lister's home in Laguna Beach as one of the places searched. It says Lister was involved intransporting drug money to Miami and was Blandon's partner in a security company. The company,according to a former employee, was doing work at a Salvadoran military air base in the early 1980s.

Lister pleaded guilty to cocaine trafficking in 1991.

Oct. 23, 1996

How Web fueled story of CIA, crack Difference in format a problem, says editor

by Eleanor Randolph and John M. Broder

Los Angeles Times

WASHINGTON - The controversy that began with the San Jose Mercury News' publication of a

series on cocaine and the Nicaraguan contras has become a case study in how information caroms aroundthe country in the digital age.

In its printed version, as the paper's editor has pointed out, the stories were careful never to claim that the

Central Intelligence Agency condoned or abetted drug dealing to support the contras.

Reporter Gary Webb has said that his research into the CIA-crack connection "ended at the CIA's door,"

but did not firmly establish a link between the agency and the crack epidemic of the 1980s.

But that unproven link has become established as fact in the minds of many Americans, and the MercuryNews' editor, Jerry Ceppos, says the way the paper used the World Wide Web to disseminate its

material may have contributed to that misinterpretation.

Even before the stories were published in mid-August, managers of the paper's Web site, Mercury

Center, were alerting Internet users to a coming bombshell.

The electronic version of the series appeared with a logo - a figure smoking crack superimposed on the

CIA seal - that was more prominent than in the newspaper series. Underneath were the words, "the storybehind the crack explosion."

Many Americans believed that the Mercury News had finally proved what had been a long-running rumor

of government complicity in the scourge of drugs in U.S. cities.

Ceppos said earlier this week that editing standards at the paper's Web site are not always consistent with

those for the print version of the paper. He said the paper deleted the CIA logo from the Web site after itbecame controversial.

"We changed the logo, because for a day or two it seemed to be the focus of attention," Ceppos said.

"You have to make sure you're keeping your standards high, and we're going to have some moreconversations about that."

The series has provoked startlingly different reactions in different media.

It ignited a storm of controversy on black-oriented radio programs and in such newspapers as LouisFarrakhan's "The Final Call," which headlined its account of the Mercury News story, "How the U.S.

government spread crack cocaine in the black ghetto."

Washington talk-radio host Joe Madison, who is also black, is starting a hunger strike to protest the CIA's

alleged role in cocaine trafficking. The newspaper series was seen by many as confirmation of what hadlong been suspected in black neighborhoods. "We've always speculated about this, but now we've got

proof," Madison said.

On the other hand, several prominent newspapers have published stories that have been skeptical aboutthe allegations. The Los Angeles Times, The Washington Post and The New York Times ran articles this

month casting doubt on a direct link between the cocaine trade and the CIA's support of the contras.

The reaction on the "new media" of the Internet has opened an additional dimension. The Mercury News'

Web site received 100,000 additional "hits" a day after the series was posted, the paper reported.

The paper invited Internet readers to comment, and hundreds replied. Many indicated that they believedthe paper had finally proved that the CIA was trafficking in cocaine in black neighborhoods.

The Mercury News broke new ground by making available not only the articles, but much of thesupporting documentation - legal affidavits, court filings, charts, diagrams and interview transcripts.

But a key document that appears to undercut one of the series' central contentions is made available on

the Internet site in heavily edited form with contradictory material left out.

That document is the court testimony of convicted drug dealer Oscar Danilo Blandon. The paper's storieslean heavily on Blandon's testimony in the recent cocaine trafficking trial of Los Angeles drug dealer

"Freeway" Ricky Ross in San Diego.

The stories cite the testimony as establishing that for a period of several years in the early- and mid-1980s,

Blandon's drug profits were going to the contras. The Internet site includes portions of the trial transcriptthat support the story's contentions.

But the complete transcript, which is not included on the Web site, includes statements by Blandon that

point in a different direction. According to his testimony, he diverted drug profits to the contras not foryears, but only during a period of months early in his career - at a time when he was making virtually no

money dealing cocaine.

During the trial, Webb says, he gave questions to Ross' attorney that the attorney, in turn, asked Blandon

under oath. Webb then used the statements elicited from Blandon as information for his series.

Webb dismisses criticism of the appearance of taking sides in a criminal case he was covering by sayingthat the Blandon testimony provided "the best interview I've ever had - while the man was under oath in a

federal court and being vouched for by two federal agencies."

Ceppos defended his reporter's relationship with Blandon's attorney. "I may be missing something here,"

he said, "but I think that everything he did with the lawyer was journalistically ethical and aboveboard."

Monday, May 12, 1997

CIA series fell short, says paper

by Associated Press

SAN JOSE, Calif. - The executive editor of the San Jose Mercury News has admitted to shortcomings in

the newspaper's controversial series on the crack-cocaine explosion in Los Angeles in the 1980s.

In an open letter to readers in the newspaper's editorial section yesterday, Jerry Ceppos said thenewspaper solidly documented that a drug ring associated with the contra rebels in Nicaragua sold large

quantities of cocaine in inner-city Los Angeles, and that some of the profits from those sales went to thecontras.

However, he said, the three-part "Dark Alliance" series, published last summer, occasionally omittedimportant information and created impressions open to misinterpretation.

"I believe that we fell short at every step of our process - in the writing, editing and production of our

work. Several people here share that burden," he wrote.

"We have learned from the experience and even are changing the way we handle major investigations."

The series, written by reporter Gary Webb, reported that a San Francisco Bay Area drug ring soldcocaine in South Central Los Angeles, then funneled profits to the contras for the better part of a decade.

The series traced the drugs to dealers Danilo Blandon and Ricky Ross, leaders of a CIA-run guerrilla

army in Nicaragua.

The Seattle Times ran the series on Aug. 22-23, 1996.

The reports sparked widespread anger in the black community toward the CIA, as well as numerousfederal investigations into whether the CIA took part in or countenanced the selling of crack cocaine toraise money for contras.

The investigations never found that the CIA had any link to drug dealing. Several newspapers alsodisputed the Mercury News report.

Ceppos wrote that while the newspaper did not report the CIA knew about the drug operations, it impliedCIA knowledge.

"Although members of the drug ring met with contra leaders paid by the CIA and Webb believes the

relationship with the CIA was a tight one, I feel that we did not have proof that top CIA officials knew ofthe relationship," he wrote. "I believe that part of our contract with readers is to be as clear about what we

don't know as what we do know.

"We also did not include CIA comment about our findings, and I think we should have."

Ceppos also said the series omitted conflicting information that Blandon testified he stopped sendingcocaine profits to the contras at the end of 1982, after being in operation for a year. That information,Ceppos said, "contradicted a central assertion of the series" and should have been included.

The editor also said the series reported the profit figures from the drug sales as fact when they wereestimates, and unfairly suggested the drugs funneled to Los Angeles played a critical role in the crack

problem in urban America.

"Because the national crack epidemic was a complex phenomenon that had more than one origin, ourdiscussion of this issue needed to be clearer," Ceppos said.

Wednesday, May 14, 1997

Mercury News retraction won't stop drug probe

by Thomas Farragher Knight-Ridder Newspapers

WASHINGTON - A federal investigator said he will continue to examine whether a California drug ringsold cocaine to aid a CIA-run guerrilla army, even though the San Jose Mercury News has backed away

from some aspects of the stories that sparked the inquiry.

"We have our own investigative agenda . . ." said Justice Department Inspector General Michael

Bromwich.

The Mercury News series spawned twin investigations by the inspectors general of the CIA and theJustice Department.

Bromwich's comment came after the Mercury News on Sunday acknowledged that its series aboutshadowy drug dealers didn't meet the paper's standards.

The inspector general drew a distinction between journalistic concerns of Mercury News editors and whatinterests government investigators. "We're not examining per se the practices in the newspaper that led tothe publication of the article," Bromwich said.

In its "Dark Alliance" series published last August, the Mercury News traced urban America's crack-cocaine explosion to a Northern California drug ring involving two Nicaraguan cocaine dealers who also

were civilian leaders of the contras, an anti-communist commando group formed and run by the CIAduring the 1980s. The series said millions of dollars in profits from the drug sales were funneled to the

contras. It never reported direct CIA involvement, though many readers drew that conclusion.

But on Sunday, Mercury News Executive Editor Jerry Ceppos told readers that "we didn't know forcertain what the profits were" and that the crack-cocaine scourge "was a complex phenomenon that had

more than one origin."

Ceppos also said the newspaper "did not have proof that top CIA officials knew of the relationship" of the

drug ring and contra leaders.

Rep. Maxine Waters, D-Calif., the chief congressional champion of a thorough investigation into thenewspaper's findings, insisted yesterday that the Mercury News, while acknowledging problems with its

series, has not retreated from findings that some drug money went to the contras.

from http://www.parascope.com/mx/articles/garywebb/garyWebbSpeaks.htm:

Gary Webb Speaks: A ParaScope Special Report

Investigative journalist Gary Webb speaks to a packed house on the CIA'sconnection to drug trafficking, and the failure of the media to expose the truth.

by Charles Overbeck

Matrix Editoreasterisle@aol.com

Dark Alliance author Gary Webb gave a fascinating talk on the evening of January 16, outlining thefindings of his investigation of the CIA's connection to drug trafficking by the Nicaraguan contras.Approximately 300 people, crowded into the First United Methodist Church in Eugene, Oregon, listened

with rapt attention as Webb detailed his experiences. Webb's riveting speech was followed by an intensequestion-and-answer session, during which he candidly answered questions about the "Dark Alliance"

controversy, his firing from the San Jose Mercury News, and CIA/contra/cocaine secrets that still awaitrevelation.

It was a fascinating exchange packed with detailed information on the latest developments in the case.Webb spoke eloquently, with the ease and confidence of an investigator who has spent many long hoursresearching his subject, and many more hours sharing this information with the public. ParaScope will have

a full report on Webb's talk on Wednesday, January 20.

In the meantime, you get another opportunity to see a ParaScope article come together from scratch, from

behind the scenes. So check back with us soon for the latest additions as this piece is developed.

[Last update 1:40 a.m. EST 1/21. Video clips and hypertext annotations coming soon.]

Transcript: Gary Webb Speaks on CIA Connections to Contra Drug Trafficking(and Related Topics)

Date: January 16, 1999

Time: 7:30 p.m.Location: First United Methodist Church, 1376 Olive St., Eugene, Oregon

Gary Webb: I look like an idiot up here with all these mikes, the CIA agents are probably behind one orthe other... [laughter from the audience]. It's really nice to be in Eugene -- I've been in Madison,Wisconsin talking about this, I've been in Berkeley, I've been in Santa Monica, and these are sort of like

islands of sanity in this world today, so it's great to be on one of those islands.

One of the things that is weird about this whole thing, though, is that I've been a daily news reporter forabout twenty years, and I've done probably a thousand interviews with people, and the strangest thing isbeing on the other side of the table now and having reporters ask me questions. One of them asked me

about a week ago -- I was on a radio show -- and the host asked me, "Why did you get into newspaperreporting, of all the media? Why did you pick newspapers?" And I really had to admit that I was stumped.Because I thought about it -- I'd been doing newspaper reporting since I was fourteen or fifteen years old-- and I really didn't have an answer.

So I went back to my clip books -- you know, most reporters keep all their old clips -- and I started

digging around trying to figure out if there was one story that I had written that had really tipped thebalance. And I found it. And I wanted to tell you this story, because it sort of fits into the theme that we'regoing to talk about tonight.

I think I was fifteen, I was working for my high school paper, and I was writing editorials. This sounds sillynow that I think about it, but I had written an editorial against the drill team that we had for the high school

games, for the football games. This was '71 or '72, at the height of the protests against the Vietnam War,and I was in school then in suburban Indianapolis -- Dan Quayle country. So, you get the idea of theflavor of the school system. They thought it was a cool idea to dress women up in military uniforms and

send them out there to twirl rifles and battle flags at halftime. And I thought this was sort of outrageous,and I wrote an editorial saying I thought it was one of the silliest things I'd ever seen. And my newspaperadvisor called me the next day and said, "Gosh, that editorial you wrote has really prompted a response."And I said, "Great, that's the idea, isn't it?" And she said, "Well, it's not so great, they want you to

apologize for it." [Laughter from the audience.]

I said, "Apologize for what?" And she said, "Well, the girls were very offended." And I said, "Well, I'mnot apologizing because they don't want my opinion. You'll have to come up with a better reason thanthat." And they said, "Well, if you don't apologize, we're not going to let you in Quill & Scroll," which isthe high school journalism society. And I said, "Well, I don't want to be in that organization if I have to

apologize to get into it." [More laughter from the audience, scattered applause.]

They were sort of powerless at that point, and they said, "Look, why don't you just come down and thecheerleaders are going to come in, and they want to talk to you and tell you what they think," and I saidokay. So I went down to the newspaper office, and there were about fifteen of them sitting around thistable, and they all went around one by one telling me what a scumbag I was, and what a terrible guy I

was, and how I'd ruined their dates, ruined their complexions, and all sorts of things... [Laughter andgroans from the audience.] ...and at that moment, I decided, "Man, this is what I want to do for a living."[Roar of laughter from the audience.] And I wish I could say that it was because I was infused with thissense of the First Amendment, and thinking great thoughts about John Peter Zenger and I.F. Stone... but

what I was really thinking was, "Man, this is a great way to meet women!" [More laughter.]

And that's a true story, but the reason I tell you that is because it's often those kinds of weird motivationsand unthinking consequences that lead us to do things, that lead us to events that we have absolutely noconcept how they're going to turn out. Little did I know that twenty-five years later, I'd be writing a storyabout the CIA's wrongdoings because I wanted to meet women by writing editorials about cheerleaders.

But that's really the way life and that's really the way history works a lot of times. You know, when youthink back on your own lives, from the vantage point of time, you can see it. I mean, think back to thedecisions you've made in your lifetimes that brought you to where you are tonight, think about how closeyou came to never meeting your wife or your husband, how easily you could have been doing somethingelse for a living if it hadn't been for a decision that you made or someone made that you had absolutely no

control over. And it's really kind of scary when you think about how capricious life is sometimes. That's atheme I try to bring to my book, Dark Alliance, which was about the crack cocaine explosion in the1980s.

So for the record, let me just say this right now. I do not believe -- and I have never believed -- that thecrack cocaine explosion was a conscious CIA conspiracy, or anybody's conspiracy, to decimate black

America. I've never believed that South Central Los Angeles was targeted by the U.S. government tobecome the crack capitol of the world. But that isn't to say that the CIA's hands or the U.S. government'shands are clean in this matter. Actually, far from it. After spending three years of my life looking into this, Iam more convinced than ever that the U.S. government's responsibility for the drug problems in South

Central Los Angeles and other inner cities is greater than I ever wrote in the newspaper.

But it's important to differentiate between malign intent and gross negligence. And that's an importantdistinction, because it's what makes premeditated murder different from manslaughter. That said, it doesn'tchange the fact that you've got a body on the floor, and that's what I want to talk about tonight, the body.

Many years ago, there was a great series on PBS -- I don't know how many of you are old enough to

remember this -- it was called Connections. And it was by a British historian named James Burke. If youdon't remember it, it was a marvelous show, very influential on me. And he would take a seeminglyinconsequential event in history, and follow it through the ages to see what it spawned as a result. The oneshow I remember the most clearly was the one he did on how the scarcity of firewood in thirteenth-century Europe led to the development of the steam engine. And you would think, "Well, these things

aren't connected at all," and he would show very convincingly that they were.

In the first chapter of the book on which the series is based, Burke wrote that "History is not, as we are sooften led to believe, a matter of great men and lonely geniuses pointing the way to the future from theirivory towers. At some point, every member of society is involved in that process by which innovation and

change come about. The key to why things change is the key to everything."

What I've attempted to demonstrate in my book was how the collapse of a brutal, pro-Americandictatorship in Latin America, combined with a decision by corrupt CIA agents to raise money for aresistance movement by any means necessary, led to he formation of the nation's first major crack marketin South Central Los Angeles, which led to the arming and the empowerment of LA's street gangs, which

led to the spread of crack to black neighborhoods across the country, and to the passage of raciallydiscriminatory sentencing laws that are locking up thousands of young black men today behind bars formost of their lives.

But it's not so much a conspiracy as a chain reaction. And that's what my whole book is about, this chainreaction. So let me explain the links in this chain a little better.

The first link is this fellow Anastasio Somoza, who was an American-educated tyrant, one of our buddiesnaturally, and his family ruled Nicaragua for forty years -- thanks to the Nicaraguan National Guard,which we supplied, armed, and funded, because we thought they were, you know, anti-communists.

Well, in 1979, the people of Nicaragua got tired of living under this dictatorship, and they rose up andoverthrew it. And a lot of Somoza's friends and relatives and business partners came to the United States,

because we had been their allies all these years, including two men whose families had been very close tothe dictatorship. And these two guys are sort of two of the three main characters in my book -- a fellownamed Danilo Blandn, and a fellow named Norwin Meneses.

They came to the United States in 1979, along with a flood of other Nicaraguan immigrants, most of them

middle-class people, most of them former bankers, former insurance salesmen -- sort of a capitalistexodus from Nicaragua. And they got involved when they got here, and they decided they were going totake the country back, they didn't like the fact that they'd been forced out of their country. So they formedthese resistance organizations here in the United States, and they began plotting how they were going tokick the Sandanistas out.

At this point in time, Jimmy Carter was president, and Carter wasn't all that interested in helping thesefolks out. The CIA was, however. And that's where we start getting into this murky world of, you know,

who really runs the United States. Is it the president? Is it the bureaucracy? Is it the intelligencecommunity? At different points in time you get different answers. Like today, the idea that Clinton runs theUnited States is nuts. The idea that Jimmy Carter ran the country is nuts.

In 1979 and 1980, the CIA secretly began visiting these groups that were setting up here in the UnitedStates, supplying them with a little bit of money, and telling them to hold on, wait for a little while, don't

give up. And Ronald Reagan came to town. And Reagan had a very different outlook on Central Americathan Carter did. Reagan saw what happened in Nicaragua not as a populist uprising, as most of the rest ofthe world did. He saw it as this band of communists down there, there was going to be another FidelCastro, and he was going to have another Cuba in his backyard. Which fit in very well with the CIA'sthinking. So, the CIA under Reagan got it together, and they said, "We're going to help these guys out."

They authorized $19 million to fund a covert war to destabilize the government in Nicaragua and help gettheir old buddies back in power.

Soon after the CIA took over this operation, these two drug traffickers, who had come from Nicaraguaand settled in California, were called down to Honduras. And they met with a CIA agent named Enrique

Bermdez, who was one of Somoza's military officials, and the man the CIA picked to run this neworganization they were forming. And both traffickers had said -- one of them said, the other one wrote,and it's never been contradicted -- that when they met with the CIA agent, he told them, "We need moneyfor this operation. Your guy's job is to go to California and raise money, and not to worry about how youdid it. And what he said was -- and I think this had been used to justify just about every crime against

humanity that we've known -- "the ends justify the means."

Now, this is a very important link in this chain reaction, because the means they selected was cocainetrafficking, which is sort of what you'd expect when you ask cocaine traffickers to go out and raise moneyfor you. You shouldn't at all be surprised when they go out and sell drugs. Especially when you pickpeople who are like pioneers of the cocaine trafficking business, which Norwin Meneses certainly was.

There was a CIA cable from I believe 1984, which called him the "kingpin of narcotics trafficking" inCentral America. He was sort of like the Al Capone of Nicaragua. So after getting these fundraisinginstructions from this CIA agent, these two men go back to California, and they begin selling cocaine. Thistime not exclusively for themselves -- this time in furtherance of U.S. foreign policy. And they began sellingit in Los Angeles, and they began selling it in San Francisco.

Sometime in 1982, Danilo Blandn, who had been given the LA market, started selling his cocaine to ayoung drug dealer named Ricky Ross, who later became known as "Freeway" Rick. In 1994, the LATimes would describe him as the master marketer most responsible for flooding the streets of LosAngeles with cocaine. In 1979, he was nothing. He was nothing before he met these Nicaraguans. He

was a high school dropout. He was a kid who wanted to be a tennis star, who was trying to get a tennisscholarship, but he found out that in order to get a scholarship you needed to read and write, and hecouldn't. So he drifted out of school and wound up selling stolen car parts, and then he met theseNicaraguans, who had this cheap cocaine that they wanted to unload. And he proved to be very good atthat.

Now, he lived in South Central Los Angeles, which was home to some street gangs known as the Cripsand the Bloods. And back in 1981-82, hardly anybody knew who they were. They were mainlyneighborhood kids -- they'd beat each other up, they'd steal leather coats, they'd steal cars, but they were

really nothing back then. But what they gained through this organization, and what they gained through

Ricky Ross, was a built-in distribution network throughout the neighborhood. The Crips and the Bloodswere already selling marijuana, they were already selling PCP, so it wasn't much of a stretch for them tosell something new, which is what these Nicaraguans were bringing in, which was cocaine.

This is where these forces of history come out of nowhere and collide. Right about the time the contras gotto South Central Los Angeles, hooked up with "Freeway" Rick, and started selling powder cocaine, the

people Rick was selling his powder to started asking him if he knew how to make it into this stuff called"rock" that they were hearing about. This obviously was crack cocaine, and it was already on its way tothe United States by then -- it started in Peru in '74 and was working its way upward, and it was bound toget here sooner or later. In 1981 it got to Los Angeles, and people started figuring out how to take thisvery expensive powdered cocaine and cook it up on the stove and turn it into stuff you could smoke.

When Ricky went out and he started talking to his customers, and they started asking him how to makethis stuff, you know, Rick was a smart guy -- he still is a smart guy -- and he figured, this is somethingnew. This is customer demand. If I want to progress in this business, I better meet this demand. So hestarted switching from selling powder to making rock himself, and selling it already made. He called thisnew invention his "Ready Rock." And he told me the scenario, he said it was a situation where he'd go to

a guy's house, he would say, "Oh man, I want to get high, I'm on my way to work, I don't have time to gointo the kitchen and cook this stuff up. Can't you cook it up for me and just bring it to me already made?"And he said, "Yeah, I can do that." So he started doing it.

So by the time crack got ahold of South Central, which took a couple of years, Rick had positioned

himself on top of the crack market in South Central. And by 1984, crack sales had supplanted marijuanaand PCP sales as sources of income for the gangs and drug dealers of South Central. And suddenly theseguys had more money than they knew what to do with. Because what happened with crack, itdemocratized the drug. When you were buying it in powdered form, you were having to lay out a hundredbucks for a gram, or a hundred and fifty bucks for a gram. Now all you needed was ten bucks, or five

bucks, or a dollar -- they were selling "dollar rocks" at one point. So anybody who had money andwanted to get high could get some of this stuff. You didn't need to be a middle-class or wealthy drug useranymore.

Suddenly the market for this very expensive drug expanded geometrically. And now these dealers, whowere making a hundred bucks a day on a good day, were now making five or six thousand dollars a day

on a good day. And the gangs started setting up franchises -- they started franchising rock houses in SouthCentral, just like McDonald's. And you'd go on the streets, and there'd be five or six rock houses ownedby one guy, and five or six rock houses owned by another guy, and suddenly they started making evenmore money.

And now they've got all this money, and they felt nervous. You get $100,000 or $200,000 in cash in your

house, and you start getting kind of antsy about it. So now they wanted weapons to guard their moneywith, and to guard their rock houses, which other people were starting to knock off. And lo and behold,you had weapons. The contras. They were selling weapons. They were buying weapons. And they startedselling weapons to the gangs in Los Angeles. They started selling them AR-15s, they started selling them

Uzis, they started selling them Israeli-made pistols with laser sights, just about anything. Because that waspart of the process here. They were not just drug dealers, they were taking the drug money and buying

weapons with it to send down to Central America with the assistance of a great number of spooky CIAfolks, who were getting them [audio glitch -- "across the border"?] and that sort of thing, so they could getweapons in and out of the country. So, not only does South Central suddenly have a drug problem, they

have a weapons problem that they never had before. And you started seeing things like drive-by shootingsand gang bangers with Uzis.

By 1985, the LA crack market had become saturated. There was so much dope going into South Central,dope that the CIA, we now know, knew of, and they knew the origins of -- the FBI knew the origins of it;

the DEA knew the origins of it; and nobody did anything about it. (We'll get into that in a bit.)

But what happened was, there were so many people selling crack that the dealers were jostling each otheron the corners. And the smaller ones decided, we're going to take this show on the road. So they startedgoing to other cities. They started going to Bakersfield, they started going to Fresno, they started going toSan Francisco and Oakland, where they didn't have crack markets, and nobody knew what this stuff was,

and they had wide open markets for themselves. And suddenly crack started showing up in city after cityafter city, and oftentimes it was Crips and Bloods from Los Angeles who were starting these markets. By1986, it was all up and down the east coast, and by 1989, it was nationwide.

Today, fortunately, crack use is on a downward trend, but that's something that isn't due to any greatprogress we've made in the so-called "War on Drugs," it's the natural cycle of things. Drug epidemics

generally run from 10 to 15 years. Heroin is now the latest drug on the upswing.

Now, a lot of people disagreed with this scenario. The New York Times, the LA Times and theWashington Post all came out and said, oh, no, that's not so. They said this couldn't have happened thatway, because crack would have happened anyway. Which is true, somewhat. As I pointed out in the firstchapter of my book, crack was on its way here. But whether it would have happened the same way,

whether it would have happened in South Central, whether it would have happened in Los Angeles at allfirst, is a very different story. If it had happened in Eugene, Oregon first, it might not have gone anywhere.[Restless shuffling and the sounds of throats being cleared among the audience.] No offense, but you folksaren't exactly trend setters up here when it comes to drug dealers and drug fads. LA is, however. [Soft

laughter and murmuring among the audience.]

You can play "what if" games all you like, but it doesn't change the reality. And the reality is that this CIA-connected drug ring played a very critical role in the early 1980s in opening up South Central to a crackepidemic that was unmatched in its severity and influence anywhere in the U.S.

One question that I ask people who say, "Oh, I don't believe this," is, okay, tell me this: why did crack

appear in black neighborhoods first? Why did crack distribution networks leapfrog from one blackneighborhood to other black neighborhoods and bypass white neighborhoods and bypass Hispanicneighborhoods and Asian neighborhoods? Our government and the mainstream media have given usvarying explanations for this phenomenon over the years, and they are nice, comforting, generalexplanations which absolve anyone of any responsibility for why crack is so ethnically specific. One of the

reasons we're told is that, well, it's poverty. As if the only poor neighborhoods in this country were blackneighborhoods. And we're told it's high teenage unemployment; these kids gotta have jobs. As if the hillsand hollows of Appalachia don't have teenage unemployment rates that are ten times higher than inner cityLos Angeles. And then we're told that it's loose family structure -- you know, presuming that there are no

white single mothers out there trying to raise kids on low-paying jobs or welfare and food stamps. And

then we're told, well, it's because crack is so cheap -- because it sells for a lower price in South Centralthan it sells anywhere else. But twenty bucks is twenty bucks, no matter where you go in the country.

So once you have eliminated these sort of non-sensical explanations, you are left with two theories whichare far less comfortable. The first theory -- which is not something I personally subscribe to, but it's out

there -- is that there's something about black neighborhoods which causes them to be geneticallypredisposed to drug trafficking. That's a racist argument that no one in their right mind is advancingpublicly, although I tell you, when I was reading a lot of the stories in the Washington Post and the NewYork Times, they were talking about black Americans being more susceptible to "conspiracy theories"than white Americans, which is why they believe the story more. I think that was sort of the underlying

current there. On the other hand, I didn't see any stories about all the white people who think Elvis is alivestill, or that Hitler's brain is preserved down in Brazil to await the Fourth Reich... [laughter from theaudience] ...which is a particularly white conspiracy theory, I didn't see any stories in the New York Timesabout that...

The other more palatable reason which in my mind comes closer to the truth, is that someone startedbringing cheap cocaine into black neighborhoods right at the time when drug users began figuring out howto turn it into crack. And this allowed black drug dealers to get a head start on every other ethnic group interms of setting up distribution systems and trafficking systems.

Now, one thing I've learned about the drug business while researching this is that in many ways it is the

epitome of capitalism. It is the purest form of capitalism. You have no government regulation, a wide-openmarket, a buyer's market -- anything goes. But these things don't spring out of the ground fully formed. It'slike any business. It takes time to grow them. It takes time to set up networks. So once these distributionnetworks got set up and established in primarily South Central Los Angeles, primarily blackneighborhoods, they spread it along ethnic and cultural lines. You had black dealers from LA going to

black neighborhoods in other cities, because they knew people there, they had friends there, and that'swhy you saw these networks pop up from one black neighborhood to another black neighborhood.

Now, exactly the same thing happened on the east coast a couple of years later. When crack firstappeared on the east coast, it appeared in Caribbean neighborhoods in Miami -- thanks largely to theJamaicans, who were using their drug profits to fund political gains back home. It was almost the exact

opposite of what happened in LA in that the politics were the opposite -- but it was the samephenomenon. And once the Miami market was saturated, they moved to New York, they moved east,and they started bringing crack from the east coast towards the middle of the country.

So it seems to me that if you're looking for the root of your drug problems in a neighborhood, nothing else

matters except the drugs, and where they're coming from, and how they're getting there. And all theseother reasons I cited are used as explanations for how crack became popular, but it doesn't explain howthe cocaine got there in the first place. And that's where the contras came in.

One of the things which these newspapers who dissed my story were saying was, we can't believe that theCIA would know about drug trafficking and let it happen. That this idea that this agency which gets $27

billion a year to tell us what's going on, and which was so intimately involved with the contras they werewriting their press releases for them, they wouldn't know about this drug trafficking going on under theirnoses. But the Times and the Post all uncritically reported their claims that the CIA didn't know what wasgoing on, and that it would never permit its hirelings to do anything like that, as unseemly as drug

trafficking. You know, assassinations and bombings and that sort of thing, yeah, they'll admit to right upfront, but drug dealing, no, no, they don't do that kind of stuff.

Unfortunately, though, it was true, and what has happened since my series came out is that the CIA wasforced to do an internal review, the DEA and Justice Department were forced to do internal reviews, andthese agencies that released these reports, you probably didn't read about them, because they

contradicted everything else these other newspapers had been writing for the last couple of years, but letme just read you this one excerpt. This is from a 1987 DEA report. And this is about this drug ring in LosAngeles that I wrote about. In 1987, the DEA sent underc