CIA turned a deliberate blind eye to Contras' drug smuggling

THE CENTRAL Intelligence Agency deliberately ignored evidence of drug smuggling by its Contra allies in the Eighties, the agency has admitted. The revelations are contained in an internal report by former CIA Inspector-General Frederick Hitz which investigated widespread allegations that the CIA co-operated with cocaine traffickers.

The Cold War was in full flood in the mid-Eighties, and the then president Ronald Reagan was on a crusade. He was intent on ousting the Sandinista regime in Nicaragua with the assistance of his CIA boss, William Casey, and Lieutenant-Colonel Oliver North of the National Security Council. Mr Reagan called the anti-Communist, anti-government Contra rebels backed by the United States "the moral equivalent of the Founding Fathers".

But there is mounting evidence that these people were deeply involved in smuggling drugs into the US, creating a domestic scourge that would continue long after the Cold War ended.

The report details dozens of allegations of drug trafficking against individuals who worked with the Contras. In six cases, "CIA knowledge of accusations or information indicating that organisations or individuals had been involved in drug trafficking did not deter their use or employment by [the] CIA."

The CIA used Alan Hyde, a Honduran businessman, to transport guns by sea from mid-1987 to late 1988. Mr Hyde had already been reported to be "making much money dealing in white gold, ie cocaine" and the US Coast Guard called him the "godfather" of criminal activity in the region. But, "There was a lot of pressure from [a senior CIA official] and DCI Casey to get the job done," a CIA officer recalled. In March 1993, a cable discouraged counter-narcotics efforts against Mr Hyde, because "his connection to [CIA] is well documented and could prove difficult in the prosecution stage". There is no evidence that the CIA told the Federal Bureau of Investigation, Drug Enforcement Administration or US Customs, that it was using Mr Hyde.

Many allegations concern the pilots who flew military supplies to the Contras. They were allegedly taking "guns down, drugs up" - filling their aircraft with cocaine on the return trip to the US. Carlos Amador, for instance, was flying supplies from Ilopango air base in El Salvador. A CIA cable in April 1986 reported that "a [Drugs Enforcement Administration] source stated that Amador was probably picking up cocaine in San Salvador to fly to Grand Caymen [sic] and then to South Florida". He warned that "[DEA] will request that San Salvador police investigate Amador and anyone associated with Hangar 4", part of the military facility used for supplying the Contras. The CIA response was direct: "Would appreciate Station advising [DEA] not to make any inquiries to anyone re Hangar no. 4 at Ilopango since only legitimate... supported operations were conducted from this facility."

The operation at Hangar 4 was run by Lt-Col North, and his "Private Benefactors", who funded a secret war after the US Congress cut off funding for the Contras. There is evidence that Lt-Col North, too, knew of allegations that people working with his operation were involved in drug smuggling. In a diary note he recorded: "Honduran DC-6 which is being used for runs out of New Orleans is probably being used for drug runs into US."

The Contras' purchasing agent in New Orleans was Mario Calero, the brother of a senior Contra leader. The CIA was told in February 1986 of allegations that Mario Calero was engaged in drug trafficking. But "no information has been found to indicate that CIA took any action in response", the report notes.

Former DEA agent Celerino Castillo says in his book Powderburn that he became aware of drug smuggling through Ilopango. In August 1986, he met Jack McCavett, "the mild-mannered CIA station chief in El Salvador", who said "we have nothing to do with that operation." Three days later, he called Mr Castillo over to his office, and pulled $45,000 from his desk drawer. "`I've got money left over from my budget," he said. `Take this for your anti-narcotics group. Go buy them some cars'."

The Hitz report is adamant that the CIA itself did not indulge in cocaine smuggling to support the Contras' operations. "No information has been found to indicate that CIA as an organisation or its employees conspired with, or assisted, Contra-related organisations or individuals in drug trafficking to raise funds for the Contras or for any other purpose," it says.

But it does provide ample evidence that the CIA turned a blind eye when drug trafficking may have been taking place, and recruited and employed contractors who were alleged to have been in the business.

People have tried to work on this subject, and have met only scepticism and hostility. An investigation by Democratic senator John Kerry came to damning conclusions, but was attacked by the government .

Most controversially, "Dark Alliance," a series of articles by journalist Gar Webb in the San Jose Mercury, claimed a conspiracy between crack dealers, the CIA and the Contras. Other newspaper failed to substantiate the strong allegations, and Mr Webb resigned from the newspaper.

Subsequently, no one has wanted to tread the same ground, fearing the same fate as Mr Webb. Yet many of his accusations surface again in other forms in the CIA's own report. As the latter makes clear, there may have been no Dark Alliance, but there was something very close.