Office of the Inspector General Department of Justice

USDOJ/OIG Special Report

THE CIA-CONTRA-CRACK COCAINE CONTROVERSY:
A REVIEW OF THE JUSTICE DEPARTMENT’S
INVESTIGATIONS AND PROSECUTIONS
(December, 1997)

TABLE OF CONTENTS

Executive Summary

I. Introduction
II. Oscar Danilo Blandon
III. Norwin Meneses
IV. OIG Analysis of Allegations Regarding Blandon's and Meneses' Relationship with the Contras and the CIA
V. Ronald Lister
VI. Ricky Ross
VII. Enrique Miranda-Jaime
VIII. Julio Zavala
IX. Carlos Cabezas
X. Celerino Castillo
XI. DEA's Response to Information about Contra Drug Trafficking and Miscellaneous Cases
XII. Conclusions

Chapter I:  Introduction
A. The San Jose Mercury News Articles
B. The Contra Story
C. Reaction from the Journalism Community
D. What Did the San Jose Mercury News Articles Allege?
E. Previous Investigations Concerning Allegations of Contra Drug Trafficking
F. Scope of the OIG Investigation
G. OIG Investigative Procedures
H. Structure of the OIG Report

Chapter II: Oscar Danilo Blandon
A. Background of Blandon
B. DEA Investigation of Blandon
C. FBI Investigation of Blandon
D. DEA and FBI Cooperation in the Blandon Investigation
E. Los Angeles Sheriff's Department Investigation of Blandon
F. The Initiation of the Federal OCDETF Case
G. The 1987 Los Angeles OCDETF Investigation
H. Closure of the OCDETF Case
I. Transfer of the Case
J. Assessment of the OCDETF Investigation
K. Allegation that Blandon received special treatment in the 1992 San Diego prosecution of him
L. Blandon's Improper Receipt of a Green Card
M. The Receipt of Green Cards by Blandon's Wife and Daughter
N. DEA Payments to Blandon

Chapter III: Norwin Meneses
A. Introduction
B. Background of Meneses
C. First reports on Meneses
D. DEA Investigations of Meneses, 1980-1986
E. The FBI and United States Attorney's Office Investigation of Meneses
F. Allegations About the Investigations
G. DEA's use of Meneses as an informant
H. Indictment of Meneses in 1989
I. Post-Indictment Activities
J. Meneses' 1991 Arrest in Nicaragua
K. Allegation that DEA Attempted to Use Meneses Against the Sandinistas
L. Status of 1989 indictment
M. Meneses' entries into the United States
N. Conclusions Regarding Investigation of Meneses

Chapter IV: OIG Analysis of Allegations Regarding Blandon's and Meneses' Relationship with the Contras and the CIA
A. OIG Review of Sources of Allegations
B. OIG Investigation Regarding Support of the Contras by Blandon and Meneses

Chapter V: Ronald Lister
A. Background of Lister
B. Lister's Dealings with Blandon, Meneses, and the Contras
C. Reports of Lister's CIA Affiliation in Connection with the 1986 LASD Search Warrants
D. Documents Seized by the LASD
E. Lister's Claims of CIA Affiliation Gathered by the FBI in 1986-1987
F. Lister's Guilty Plea to Tax Charges
G. Orange County Prosecution of Lister
H. The 1990 San Diego Prosecution
I. Claims of CIA Affiliation While Lister Was Cooperating
J. More Allegations by Lister Regarding the CIA at the Time of His Sentencing
K. Lister's Appeal of His Sentence and Release
L. David Scott Weekly
M. Timothy LaFrance
N. Conclusions

Chapter VI: Ricky Ross
A. Ross' Criminal History
B. Ross' Statements about his Drug Empire to the Media and OIG
C. The Roles of Ross and Blandon in the Spread of Crack
D. Law Enforcement Investigations of Ross
E. Media Attention After Ross' Release from Prison
F. The 1996 Case against Ross in San Diego
G. OIG Analysis of Ross' Allegations

Chapter VII: Enrique Miranda-Jaime
A. Background
B. Miranda's Drug Trafficking for the Sandinistas
C. Miranda's First Contact with United States Government
D. Allegations of Contra Drug Trafficking
E. Miranda's 1991 Arrest
F. Miranda Escapes From Prison and Obtains a Visa
G. Miranda's Entry into the United States and Return to Nicaragua
H. Conclusions

Chapter VIII: Julio Zavala
A. Background to the Frogman Case
B. Allegations of Zavala's Connections to the Contras and the CIA
C. Allegation that the Return of the Seized Money to Zavala Was Caused by Intervention from the CIA
D. Allegations in 1986 Newspaper Article Regarding the Return of the Money
E. OIG Conclusions Regarding the Return of the Money
F. The Return of the Money
G. Did the Money Belong to the Contras?

Chapter IX: Carlos Cabezas
A. Cabezas' Allegations Concerning the "Contra Cocaine Connection"
B. Cabezas' Allegation Concerning the CIA
C. Cabezas' Earlier Claims
D. FBI Investigation of Cabezas' Claim About a "Contra Cocaine Connection"
E. OIG Investigation of Cabezas
F. Assessment of Cabezas' "Contra Cocaine Connection" Allegations
G. OIG Conclusions on the "Contra Cocaine Connection" Allegations

Chapter X: Celerino Castillo
A. Background
B. Castillo's Allegations
C. Castillo's Allegation Concerning Ilopango Airport
D. DEA Headquarters' Review of Allegations of Contra Drug Trafficking
E. Castillo's Later Interaction with Salvadoran Personnel
F. OIG Interviews of other DEA and Embassy Personnel
G. Castillo's Allegation regarding a CIA employee
H. Castillo's Allegation Regarding the CIA's use of informant STG6
I. Castillo's Recent List of Relevant Files
J. Allegation that the DEA Retaliated Against Castillo
K. Castillo and the Office of Independent Counsel
L. OIG's Evaluation of Castillo's Allegations

Chapter XI: DEA's Response to Information About Contra Drug Trafficking And Miscellaneous Case
A. Introduction
B. General Relationship between DEA and CIA During the Period of the Contra Revolution
C. DEA/CIA Interaction in Costa Rica
D. Classified Memoranda from CIA to DEA on Drug Trafficking by the "Southern Front" Contras
E. Other CIA Information
F. Information Passed By CIA Regarding Jorge Morales, Adolfo "Popo" Chamarro, and Roberto "Tito" Chamarro
G. DEA's Investigation of Information It Received About Contras or Contra Sympathizers
H. John Hull
I. Jose Orlando Bolanos

Chapter XII: Conclusions

Appendix A: Background on United States Funding of the Contras
Appendix B: Production of Cocaine Hydrochloride and Cocaine Base
Appendix C: History of Cocaine
Appendix D: Enrique Miranda's Entry Into the United States and Return to Nicaragua.
Appendix E: Timelines for Blandon, Meneses, Lister, Ross, Miranda, Zavala/Cabezas, Castillo
Appendix F: Glossary

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