AUGUST 21, 1996

Report links drug ring, CIA, Contras

The Associated Press

SAN JOSE, Calf.-Throughout the 1980s, a San Francisco Bay area drug ring sold tons of cocaine to Los Angeles street gangs and funneled the profits to some of the CIA-run Contras in Nicaragua, a newspaper reported.

Repeated attempts to prosecute the ring's kingpin were thwarted by the CIA, possibly to cover up ties between the traffickers and Contra leaders, the San Jose Mercury News reported in a series of articles after a year long investigation.

The newspaper's report, based on recently declassifed federal reports, court testimony and interviews, also alleges that the drug network was partly responsible for the ongoing "crack" problem in Los Angeles.

The money pipeline was created after the CIA combined several armies to create the 5,000 member anti-communist Fuerza Democraticia Nicaraguense (Nicaraguan Democratic Force) in mid-1981, the newspaper reported.

The same year, the drug ring sold almost a ton of cocaine to the Crips and Bloods, notorious Los Angeles gangs, for $54 million, said Oscar Danilo Blandon Reyes, I a former force leader and government informant.

"There is a saying that the ends justify the means," Blandon testifled in 1994. "So we started raising money for the Contra revolution."

The Mercury News identifed the primary buyer as Ricky Donnell Ross, or "Freeway Rick," a notorious South-Central Los Angeles dealer who bought powder cocaine, turned it into crack and sold it wholesale throughout the city and the nation.

Blandon spent 28 months in U.S. prison for dealing drugs, the Mercury News said. He was released from prison in 1994 to become a full- time informant for the federal Drug Enforcement Administration, a job that has since paid more than $166,000.

How much of the drug ring's profits went to the Fuerza Democratica Nicaraguense before it disbanded in 1988 still is unclear. But in his testimony, Blandon said, "whatever we were running in L.A., the profit was going to the Contra revolution."

Blandon's boss, Juan Norwin Meneses Cantarero, was a major drug dealer and smuggler who ran the Fuerza Democratica Nicaraguense operation from his homes in Burlingame and Pacifica in Northern California, the paper reported.

Although records show that the U.S. government was aware of Meneses' dealings since 1974, the Mercury News reported that he has never been in a U.S. prison. Meneses currently is serving time in Nicaragua after being arrested in connection with a 750-kilo shipment of cocaine.

Federal prosecutors blame the CIA and other federal departments for Meneses' relatively sweet treatment in the United States, the Mercury News said.

"The Justice Department flipped out to prevent us from getting access to people, records anything that would help us find out about it,"said Jack Blum, former chief counsel to the Senate subcommittee that investigated alleged cocaine traffcking to the Contras. "It was one of the most frustrating exercises that I can ever recall."

Agents from four other agencies, including the DEA, U.S. Customs, the Los Angeles County sheriff's office and the California Bureau of Narcotic Enforcement, also have complained that the CIA hampered investigations, the Mercury News reported.

The reason might well be Meneses' own connections to the CIA, the Mercury News said. One piece of evidence-a picture taken in June 1984 shows Meneses with Adolfo Calero, a longtime CIA operative and Fuerza Demoratica Nicaraguense political boss.

But efforts to trace the government's knowledge of the drug ring have similarly been thwarted, the newspaper reported.

Freedom of Information Act requests that reporters filed with the CIA and DEA have been denied on national security and privacy grounds. A Freedom of Information request filed with the FBI has so far been ignored, the Mercury News reported.

While Blandon has never said he was selling cocaine for the CIA, Bradley Brunon, his lawyer, said he has drawn his own conclusions from the CIA's clandestine behavior.

"Was (Blandon) 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 those guys get these big aircraft."