Webb, Gary. Dark Alliance: the CIA, the Contras, and the crack cocaine explosion. Seven Stories Press: NY. 1999.

Biography: Gary Webb was an award-winning journalist for several publications.

He was contacted while working for the San Jose Mercury News by the girlfriend of Rafeal Cornejo, a trafficker in Norwin Meneses organization and former CIA asset under indictment in San Fransisco, to investigate CIA involvement with the coke trade during their support of the Contra war effort. His research culminated in the 3 part series Dark Alliance that sparked a media frenzy that was effectively stifled. He recently committed suicide with two gunshot wounds to the head.

Research question/hypothesis: Webb’s investigation created an interesting angle to the contra cocaine story that broke in the mid 1980s by probing the relationship of traffickers under the protection of the CIA to regional distribution networks in the US. His study of the relationship of Ricky Ross, the South Central kingpin that was one of the country’s major crack suppliers, to Danilo Blandon resulted in his hypothesis that the CIA was responsible for allowing the cocaine that created the crack epidemic to enter into the country.

Data: Webb’s research consisted of interviews, DEA and customs reports, the Kerry subcommittee report, and court transcripts involving members of the coke trafficking and distribution networks under investigation.

Findings:

Coca paste, which in the 1970s predominantly came from cocaine processing labs in the jungles of Peru and Bolivia, was the extract from coca leaves mixed with toxic substances such as kerosene, acid, gasoline, and other chemicals used to extract it. Dr. Robert Byck, a Yale professor and drug expert, Dr. Raul Jeri, a Peruvian police psychiatrist, and David Paly, a Yale student, found through their research that the coca paste, or base, smoking epidemic that had taken hold in Peru, Bolivia, and Columbia in the mid 1970s, caused massive addiction and severe mental and health problems for the users. All warned of the epidemic spreading towards the north. Their research was largely ignored. (p. 25-33)

Cocaine traffickers from the US heard of the fad of smoking base, confused coca paste with cocaine base, removed the hydrochloride salt from street cocaine, and introduced the art of freebasing to the drug market. Due to the high cost of cocaine, freebasing was reserved for wealthy drug users. (p. 33)

The Carter administration embarked on the ‘Andean Strategy’, the tactic aimed at eliminating cocaine use through eradication of the coca plant. (p. 36)

Julio Blandon, Danilo Blandon’s father, and Anastasio Somoza were two of Nicaraguas largest landholders before the 1979 revolution. Danilo worked as director of an agricultural program jointly funded by the US and Somoza governments to introduce a free market to Nicaragua by creating distribution points where farmers could sell their goods to wholesalers. (p. 42)

Edgar and Jacinto Torres ran a cocaine distribution network from their used car lot where Danilo worked while in exile. The brothers lived with two sisters who were the cousins of Pablo Escobar. (p. 44)

Carlos Lehder of the Cali cartel bought an island in the Bahamas where planes flying coke from Colombia could stop and refuel before flying to the US. (p. 44)

Enrique Bermudez, a longtime friend of the CIA, was recruited in 1980 to run a contra faction, the Legion of September 15, in Guatemala. The legion trained on a farm in the town Esquipulas, the headquarters of the CIA trained group that overthrew the Guatemalan government in 1954. The legion engaged in paramilitary activity to fund its operations against the Sandinistas. (p. 47)

Colonel Edmundo Meneses Cantarero, Norwin Meneses’ brother, was commander of the Managua police under the Somoza dictatorship. Norwin Meneses career as a drug kingpin began in the mid 1970s when he received a large marijuana shipment Edmundo had seized from the Columbians. (p. 52)

The National Guard of Nicaragua was responsible for all shipments of arms and goods the country received who after checking the cargo distributed it to retail outlets. (p. 53)

Norwin Meneses revealed in an interview in 1996 that while working for Somoza’s Office of National Security (ONS) he had started an armed guerilla group to support Castro’s revolution in Cuba. (p. 54-5)

Meneses formed a drug distribution network on the west coast in support of Bermudez’s troops that moved 900 kilos of cocaine, worth $54 million in wholesale prices, into the US in 1981. He served as Bermudez’s bodyguard in CA and personally selected recruits for his Contra faction. It is unclear how early Danilo Blandon joined Norwin Meneses’ organization, however, by 1981 Meneses placed Blandon in charge of raising money for the Contras in Southern California while he ran a distribution ring in the Bay area. (p. 62)

The National Democratic Union (UDN) was a group of Nicaraguan exiles in Miami who funded a small guerilla group in Honduras, the Revolutionary Armed Forces of Nicaragua (FARN). Fernando ‘El Negro’ Chamorro and his brother Edmundo, both former military commanders for the Sandinistas, became the military leaders of the UDN-FARN. The UDN-FARN and the Legion of September 15 were connected to the Cuban community of Miami who supplied them with money and personnel. (p. 67-71)

In August 1981 the CIA merged the UDN-FARN and the Legion of September 15 into a single unified force called the Nicaraguan Democratic Front (FDN). The CIA selected the FDN leadership choosing Aristides Sanchez and Enrique Bermudez, both close friends of Norwin Meneses, as the FDN commanding officers. Aristides Sanchez was placed in charge of the contra supply line. In an effort to provide a layer of deniability to involvement with the contra troops the CIA arranged for the governments of Argentina and Honduras to provide training and supplies in exchange for increased economic and military aid to the countries. (p. 72-4)

Julio Zavala’s west coast drug ring distributed the cocaine of Cali cartel kingpins Humberto and Fernando Ortiz controlled by Sebastian Pinel in L.A. and Alvaro Carvajal Minota in San Fransisco and Peruvian cocaine controlled by the Sanchez brothers and Horacio Pereira in Costa Rica. In 1981 Carlos Augusto Cabezas Ramirez, former head of Managua’s Bank of America branch, was recruited while in exile to serve as a courier between Miami, Central America, and San Fransisco delivering the profits from the Costa Rican cocaine to the FDN leadership. The infamous frogman case where $36,020 of seized drug money was returned to Contra commanders was the DEA bust of Zavala’s and Cabezas’ drug ring. (p. 82-5)

Norwin Meneses’ 5^th wife was Blanca Margarita Castano, cousin of Bayardo Arce Castano, the most radical of the Sandinista leaders. (p. 102)

In 1981 Ronald Jay Lister, a former L.A. policeman, incorporated the private security firm Pyramid International Security Consultants. With the help of Norwin Meneses and Danilo Blandon, Lister received a contract to sell arms to the Government of El Salvador and Roberto D’ Aubuisson, leader of the ARENA party and commander of numerous death-squads, for their war with the FMLN guerillas. Pyramid also filled contracts to supply arms to the Contra troops in Honduras. (p. 108-110)

Timothy LaFrance, an arms manufacturer who worked with Pyramid on its contracts with El Salvador, was contacted in 1983 by the Cabazon Indians of S. California to build a weapons plant on their reservation. The tribal administration, under the leadership of a man who claimed to have longstanding ties to the CIA, had already contracted Wackenhut International Inc., a security firm, to operate on their territory. The firm used the reservation’s tax-exempt status and freedom from federal constraints to gain advantage on contracts for security projects. Independent journalist Danny Casolero was found dead in a hotel room while researching the use of reservations to manufacture weapons for third world armies particularly the contras. (p. 114)

Cocaine distribution and consumption in South Central L.A. during the 1970s was minimal. Demand for cocaine did not appear in the inner cities until the early 1980s when the market was flooded with increased supply causing a dramatic drop in price. (p. 134)

In 1979 a Select Committee investigating cocaine publicly released the recipe to turn cocaine powder into crack. In 1981 the pamphlet published by T. Davidson The Natural Process: Base-ic Instructions and Baking Soda Recipe gave step-by-step instructions on how to make crack. Cocaine was for the first time accessible to low-income communities through sale of low priced crack rocks. (p. 141)

Ricky Ross, a South Central L.A. dealer who became the largest crack retailer on the west coast, began by moving small-scale amounts of cocaine for his former friend and auto upholstery teacher, Mr. Fischer. Ricky Ross went on to take over Mr. Fischer’s cocaine source Ivan Arguellas, a Nicaraguan exile supplied by the Torres brothers. When Ivan Arguellas' wife shot him in the back in the early 1980s Danilo Blandon became Ricky Ross’ source of supply driving down the price of cocaine to $1,800 a kilo. The crack phenomenon had just taken hold in South Central through the ‘rock house’ marketing strategy where crack was cooked, sold, and consumed under one roof. With access to the lowest kilo prices Ricky Ross became the wholesale supplier to many area rock houses. By 1982, within a year of crack’s introduction to the market, Ross was moving over 200 kilos of coke or 5 million crack rocks through South Central monthly. (p.138-50)

The Miami crack market explosion followed South Central by a year but on a relatively smaller scale until the arrival of Jamaican posses formed during the political upheaval in Jamaica during the 1970s. Rival political gangs responsible for widespread violence formed due to the CIA’s campaign to destabilize the socialist government of Michael Manley. Following the 1980 election won by the CIA backed Labor Party candidate political gunmen from both sides immigrated to Miami and NY, took control of the drug and weapons market, and sent profits to their party of allegiance in Jamaica. The Jamaicans grew to become the largest cocaine and crack distributors on the east coast. (p. 144)

CAUSA, a conservative political organization that was part of Rev. Sun-Myung Moon’s Unification Church, which worked with the Korean Intelligence Agency, began supporting the Contras with money and supplies after the Boland Amendment prohibited Federal financial support. (p. 167)

Danilo Blandon sold South Central L.A. cocaine, weapons, and advanced telecommunication and eavesdropping gear. He bought a car lot with his Mexican trafficking colleague Sergio Guerra to launder his black market profits. (p. 176-9)

In 1984 Ricky Ross expanded his source of supply from his exclusive relationship with Danilo Blandon to include the Torres brothers. Blandon and the Torres brothers entered into a price war to compete for Ross’ business further driving down the price of the kilo and increasing the accessibility of crack. (p. 183)

The rock house system for crack distribution was easily franchised by neighborhood gangs, which was a contributing factor to the rapid spread of the crack epidemic throughout the country. The street gang characteristic to the inner city was transformed by the introduction of crack into national criminal syndicates. The Crips and the Bloods extended their territory from L.A. to nearly every major city in the US. (p.187-8)

Ronal Lister supplied Blandon with the weapons sold to Ricky Ross and associates through his private security firm Mundy Security Group incorporated in 1983. Mundy Securities was contracted by the State Department in 1983 to export munitions lists to other countries. (p. 191-3)

William Nelson, a business associate of Ronal Lister and security director for the Fleur Corporation, worked on the destabilization of Chile and commanded operations in post-colonial Angola as director of covert operations for the CIA. The arms used in these operations and the Contra war efforts were supplied by the US through the use of conduit countries. (p. 197)

Norwin Meneses worked for the DEA to gather information on the murder of agent Enrique Camarena believed to have been killed for his investigation into a protected marijuana plantation in Mexico. (p. 205)

The majority of contra arms and drug trafficking conducted by the Meneses organization in Costa Rica centered in Guanacaste Province; their headquarters 1984-5. Noriega’s pilots would transport arms and drugs to the site where the arms would stay for the Contras and the drugs would be sent north to the US through Mexico for the west coast market or the Bahamas to be sold on the east coast. (p. 210)

Sebastian “Guachan” Gonzalez, a large-scale smuggler and owner of cocaine processing plants, was hired by the CIA in 1983 to direct the shipment of supplies from Panama. (p. 213)

Frigorificos de Puntarenas, S.A., a Costa Rican shipping co. and a Miami import co. operated by Cuban-American drug traffickers, was one of a series of companies that laundered drug money for the Contras. Money received by Frigorificos was laundered to places like Israel and S. Korea. (p. 238-40)

DIASCA, the Miami aircraft co. operated by CIA asset Alfredo Caballero, aided Floyd Carlton’s smuggling operation of cocaine controlled by Noriega. (p. 244)

Luis Posada, the main contact in a cocaine smuggling operation with members of the Venezualan Government, was hired by the CIA to control contra supply shipments at the Iloponago Airforce Base in El Salvador alongside Felix Rodriguez, the murderer of Che Guevara. (p. 254)

Norwin Meneses transported drugs through El Salvador with the help of the Salvadoran AirForce and Marcos Aguado, chief pilot for the ARDE forces and CIA agent. (p. 250)

Colombian trafficker Allen Rudd claimed that Vice President Bush made a deal with the Medellin cartel where planes would deliver guns to the cartel for sale to the contras and return with cocaine to be offloaded at US military bases. Pablo Escobar had photographic evidence of planes used in the contra supply operation being loaded with cocaine and a picture of George Bush posing with Jorge Ochoa in front of a suitcase filled with money. (p. 261-2)

Frederico Vaughn, the Sandinista official caught in a photograph taken by Barry Seal transporting Medellin cartel coke, may have been on the CIA payroll. He was deputy director of the Sandinista import-export co. Heroes and Martyrs Trading Corporation, a company heavily infiltrated by CIA operatives. (p. 264)

Walter ‘Wally’ Grasheim, an arms broker working for the Litton Corp. as the representative to El Salvador, was a drug trafficker intimately involved in the contra supply operation at Iloponago. (p. 267)

The passage of Proposition 103 in CA which slashed property taxes resulted in an increase in police corruption where forfeiture laws that turned over the seized drug money and assets from traffickers and launderers was used to pay for the police department’s salaries and supplies. (p. 271)

Roberto Orlando Murillo, former director of the Central Bank of Nicaragua and the representative of 2 Swiss banks in Managua and Panama, laundered Danilo Blandon’s drug profits. (p.275)

CIA informant Joe Kelso reported that the CIA operated a drug lab at the Contra base in Quepos, Costa Rica. (p. 308)

Aparacio Moreno, a Colombian supplier and money launderer for Norwin Meneses’ San Fransisco and Danilo Blandon’s L.A. operations, arranged for cocaine delivery to the syndicates through Oklahoma. (p. 323)

Scott Weekly, a business associate of Ronald Lister who also sold Blandon advanced weaponry, and James “Bo” Gritz, a military intelligence officer, were recruited by the CIA in 1986 to train the Afghan Mujahedeen. The men obtained the approval of State Department officials William Bode and Nestor Pino Marina, suspected CIA agents who worked on a covert paramilitary operation with the company Falcon Wings Inc. and Alan Fiers, to participate in the operation. Bode claimed to have 6 or 7 radical subgroups in the Afghan resistance also in need of training. (p. 339-40)

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