Contras, Crack, the C.I.A.
Allegations that contra rebels, under the benevolent gaze of the C.I.A., smuggled cocaine into U.S. cities to finance their war in Nicaragua have brought new promises of a thorough federal investigation. Yet according to government documents recently obtained by The Nation, evidence that the U.S. government turned a blind eye to contra drug trafficking has long resided in Washington files. Those records show that Ronald Reagan's Justice Department brushed aside many eyewitness accounts of C.I.A. links to contra smuggling.
Typical was the case of 31-year-old Wanda Palacio, who broke with Colombia's Medellin cartel in 1986 and became an F.B.I. informant. Palacio also approached Massachusetts Senator John Kerry and told his office that she had witnessed cocaine being loaded onto planes bearing the markings of Southern Air Transport, a onetime C.I.A.-owned airline then under Pentagon contract.
Kerry, who was already investigating the contras, hand-delivered Palacio's eleven-page "proffer" statement on September 26, 1986, to William Weld, then the Justice Department's Assistant Attorney General for Criminal Affairs. According to Palacio's statement, she had stood with cocaine kingpin Jorge Ochoa at the airport in Barranquilla, Colombia, in 1983 as a cocaine shipment was loaded onto a Southern Air Transport plane. Palacio said that Ochoa told her it was "a C.I.A. plane and that he was exchanging drugs for guns." Ochoa added that he was giving money to both the Nicaraguan contras and the ruling Sandinistas to hedge his bets against any outcome of their civil war. (This point was corroborated in F.B.I. interviews with a drug cartel lawyer, Patricia Velez, who also claimed that "Ochoa finances both Sandinista and anti-Sandinista in Nicaragua.")
Two years later, Palacio said, in early October 1985, she was back in Barranquilla with some of Ochoa's aides as another Southern Air Transport plane was loaded with cocaine. "I concluded that the guns-for-drug connection still continued," she said.
According to notes taken by a member of Kerry's staff, Weld chuckled as he read the sections about C.I.A. personnel. "This isn't the first time today I've seen allegations about C.I.A. agent involvement in drugs," Weld reportedly remarked. "There are bum agents, former and current C.I.A. agents."
Over the next week, Weld's 1986 calendars show, he had frequent phone conversations about the Palacio allegations. But at a follow-up meeting with Kerry's staff on October 3, Justice officials challenged Palacio's credibility. She had claimed, for instance, that she contacted the F.B.I. in June, but the F.B.I. said the first meeting was in mid-July.
Palacio's testimony conflicted with President Reagan's insistence that the U.S. government was not arming the contras and that contra leaders were not drug traffickers. On October 5, however, a Sandinista soldier shot down one of Oliver North's gunrunning planes inside Nicaragua. The co-pilot, Wallace "Buzz" Sawyer, and two others died. A cargo handler named Eugene Hasenfus was the only survivor.
Later that week, as Palacio was again meeting with Kerry's investigators, she gasped when she saw Sawyer's photo flash on the TV. Palacio exclaimed that Sawyer had been one of the Southern Air pilots she saw loading cocaine in Barranquilla in early October 1985 -- an assertion met with incredulity by Kerry's staff. But after the plane crash, the Associated Press sent me on assignment to Managua, where Sandinista military intelligence chief Ricardo Wheelock showed me documents recovered from the plane. I scribbled down all the entries from Sawyer's flight logs, in which the pilot had used airport codes to designate the cities visited. I deciphered them only after returning to Washington. Three entries -- for October 2, 4 and 6, 1985 -- listed Sawyer flying a Southern Air L382 from Miami to Barranquilla.
Palacio's passport established that she was in Colombia during that period. In addition, she passed an F.B.I. polygraph exam about her Colombia account. But the Justice Department noted that Palacio's responses to several other questions came up "inconclusive," and Weld refused to pursue her allegations.
On November 25, 1986, the Iran/contra scandal broke wide open with disclosure of Oliver North's diversion of Iranian arms profits to the contras. As the scandal spread, Palacio's story hit the Miami news media. Southern Air officials admitted that Sawyer flew their planes but angrily denied involvement in cocaine smuggling. The company filed a libel suit against one TV station that carried the Palacio story -- a suit that immediately chilled media coverage (years later it was dismissed).
Wearied by the Justice Department, in a Senate deposition on August 7, 1987, Palacio complained that "the FBI stopped working with me all of a sudden because of this Southern Air Transport deal.... Justice doesn't want to hear me." After her encounter with Washington politics, Palacio returned home to Puerto Rico. Other contra-cocaine witnesses suffered similar rebuffs.
But the C.I.A.-contra-drug connection rose to national prominence recently when reporter Gary Webb wrote a series for the San Jose Mercury News describing the street-level impact of the contra cocaine in Southern California. Drawing from court records and documents at the National Archives, Webb detailed how -- with near impunity -- contra leaders smuggled the cocaine that fueled the crack epidemic. Webb's series touched off an uproar in black communities.
The question of C.I.A. knowledge of contra drug smuggling, borne out by other documents obtained by The Nation, could resonate in Massachusetts as well this election year. Weld, now the Republican Governor of that state, is the G.O.P. candidate challenging John Kerry for his Senate seat. When I asked Weld about Wanda Palacio, he responded with uncharacteristic harshness, declaring that his Justice aides had "felt her credibility was roughly that of a wagonload of diseased blankets."
But Charles Saphos, who was Weld's narcotics chief at Justice, was much less strident. "I would not put her up as a government witness without more corroboration," he told me. The larger truth about Wanda Palacio may be that she was a witness who brought forward unwelcome news about the contras, the C.I.A. and cocaine.
ROBERT PARRY
Robert Parry, director of The Nation Institute's investigative unit, co-wrote the first news story about contra drug trafficking for the Associated Press in December 1985. He is publisher of The Consortium, an investigative zine on the World Wide Web.
Linkage:
From the San Jose Mercury News:
Dark Alliance: The Story Behind the Crack Explosion by Gary Webb, San Jose Mercury News staff writer.
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