CIA - Contras
Report on Drug Connection between the CIA and the CONTRAS
[BACK]
APPENDICES
Appendix A
Jack Terrell
1.Background. Jack Terrell alleged that John Hull and the Contras were involved in drug trafficking. He also
alleged that there was a plot involving Contra supporters to assassinate a U.S. Ambassador on behalf of
Colombian drug traffickers. No information has been found to indicate that Jack Terrell had any contact with
CIA or that CIA had any information indicating Terrell was involved in drug trafficking with the Contras.
2.CIA Records A January 28, 1986 cable to Headquarters requested traces concerning Terrell and stated:
. . . according to the local [FBI, Terrell] claims to have contact with [CIA] by virtue of his service
with the Nicaraguan Democratic Force in Honduras and Nicaragua from 1984-85. . . . [Terrell] said
he is known . . . by his nom de guerre of "Flaco." . . . [Terrell] has identified his [CIA] contact as
one "Rob Owens."
3.A January 28, 1986 response to the trace request stated that Terrell was believed to be identical with a
Civilian Military Assistance (CMA) member who used the alias "Flaco" while in Honduras. The cable noted
that:
. . . In March 85 he and 13 other [American citizens] associated with CMA were asked by [the
American] Embassy to return to [the continental United States] from the Mosquito [sic] where they
allegedly were planning to enter Nicaragua to blow up a bridge. The group including "Flaco" were
[sic] repatriated to [continental United States] two days later. [Terrell] was not in contact with
[CIA]. . . .
4.A March 24, 1986 FBI telex to CIA provided information from an FBI New Orleans office March 17, 1986
interview of Terrell. Reportedly, Terrell told the FBI that there had been several meetings in the Miami area
between December 9 and December 23, 1984 involving CMA members--including Terrell--and Contras
Stedman Fagoth and Wycliff Diego. According to Terrell, he was discussing tactics to be used by the Contras
when he was called out of the meeting by the leader of the CMA, Tom Posey, to meet a person called
"Corbo," who could provide the CMA with money, weapons, transportation, and "everything we've been
looking for." Those who had been discussing tactics with Terrell allegedly became angry and told Terrell,
"You don't want to meet with [Corbo] because he is into drugs and arms and he works directly for Francisco
Chanes." Terrell also reportedly told the FBI that Posey had arranged for him to meet with Francisco Chanes
who offered a million dollars if the CMA would assist in the sale of frozen lobster imported from Costa Rica.
According to Terrell, a U.S. citizen associate of John Hull, was also present at this meeting.
5.An April 4, 1986 Headquarters cable to the FBI provided traces regarding Terrell and persons mentioned by
him in his FBI debriefing:
Results of this Agency's traces on Jack (Terrell) were passed telephonically to the FBI. In
addition... Terrell's February trip to Costa Rica was arranged by [U.S. journalist] Avirgan. Besides
falsely claiming employment by the . . . CIA, Terrell claimed arms for the . . . FDN come from
Miami, Houston, New Orleans, Panama and El Salvador. Further he stated that the CIA buys arms
in the Dominican Republic and ships them via Fort Lauderdale to Honduras. While in Costa Rica
Terrell also revealed the names of alleged CIA and Department of Defense personnel who he says
are involved in Anti-Sandinista activity. Sources who encountered Terrell described him as an
extreme rightist and mentally unstable.
6.On April 11, 1986, an article in The Washington Post stated that:
Jack Terrell, who was a leader of the American paramilitary group . . . CMA, said FBI agents and
prosecutors from the U.S. attorney's office in Miami have met with him several times with at least
two of those sessions becoming full-day meetings. Terrell said the investigators asked him about
alleged weapons shipments from the United States to contra base camps in Central America, contra
involvement in drug smuggling, and a reported conspiracy to assassinate the U.S. ambassador to
Costa Rica, Lewis Tambs.
7.An April 15, 1986 cable to Headquarters commented that Terrell had made "scurrilous attacks on [CIA]".
8.A May 8, 1986 FBI telex to CIA and other U.S. Government agencies reported that the FBI had attempted
"to locate Jack Terrill [sic] at his residence" in New Orleans. The owner of the apartment building where
Terrell lived and where he served as building manager and handyman had reportedly said that:
. . . on or about April 20, 1986, she received a call from another of the tenants in the building,
stating that a strange woman of oriental appearance was taking the bed from the apartment
previously occupied by Terrell. [The owner] went to the apartments [sic] and discovered that the
bed and the . . . oriental woman were both gone. Terrell had apparently left, taking all of his
possessions. Upon further checking, she determined that approximately $2000 was missing from
the petty cash fund, as was about $2100 from the receipts from the soft drink machine. [The owner]
stated that she had gone to the police and filed a complaint against Terrell. . . . [The owner] stated
that she understood that Terrell did some very mysterious things and that it was possible that he
had been forced to run and hide owing to his peculiar situation vis-a-vis international affairs.
An unsigned memorandum, dated "summer '86" and entitled "FBI Background on Jack Terrell, stated that:
. . . [his a]rrest record begins in 1957 with an arrest for auto theft. Thereafter the record indicates
numerous arrests for robbery, larceny, grand larceny, and burglary.
9.An unsigned memorandum, with a handwritten date of July 18, 1986 and entitled "Traces on Jack
Terrell, a.k.a. Colonel Flaco," stated that information was provided that there was:
a call from Terrell who called from Senator Kerry's office. . . . Because of FBI interest in the
whereabouts of Terrell, we informed the Bureau's Counterterrorism Planning and Special
Investigations Office at a 2 May meeting that Terrell was in the Washington area and had met with
Senator Kerry's Staff. . . .
10.A July 31, 1986 cable requested traces concerning Terrell on behalf of the FBI. According to the cable, the
local FBI office had provided a copy of a report from an FBI office indicating that Terrell had contacted the
FBI in Houston, Texas,:
. . . offering to provide information on Central American groups, Iranians and African National
Congress (ANC) principals. [FBI] interviewed [Terrell] in August 1985 and again in February 1986.
Terrell provided in-depth details on the "La Tronquera" training camp along the Nicaraguan
border with Honduras.
11.A September 29, 1986 cable to Headquarters reported that a FBI Washington Field Office Special Agent
had advised that the FBI interrogated Terrell in the course of an investigation concerning a threat to the
President. According to the cable, Terrell told the FBI that:
. . . he had recently returned from Manila where had had been offered one million USD[ollars] to
establish a radio station for the New Peoples' Army by the head of the Communist Party [sic].
[Terrell] asked the case agent to put him in touch with [CIA] so that he might relate the story
directly to those involved. . . . [Terrell] works for the Center for Developmental Policies . . . [in]
Washington DC.
12.A March 29, 1988 Headquarters cable provided a draft of a memorandum that Headquarters proposed to
distribute to the FBI and several U.S. military organizations as "a summary of all the information [CIA] has
received on . . . Terrell since January 1988. . . ." The cable detailed Terrell's involvement with an insurgent
leader of the Kachin Independence Organization based in Northern Kachin State, Burma. The cable also
noted that "in Burma and Thailand Terrell is advertising himself as a former [CIA] officer." Finally, the cable
stated that Terrell has recently arrived in Manila and rented an apartment.
13.An April 6, 1988 memorandum from the DDO to the Director of the FBI and several U.S. military
organizations included the information that was reported in the March 29 cable. The first paragraph of the
memorandum stated that "The CIA has no involvement in Terrell's activities nor do we want any type of
relationship with him." The memorandum also included the statement that "Terrell has never been employed
by CIA." Most of the memorandum recounted a briefing provided by a U.S. Marine who was an intelligence
officer serving at the Marine Barracks at Subic Bay. The Marine officer recounted that Terrell had offered his
services to an insurgent group in Burma and claimed to be a former CIA officer. The Marine officer
reportedly had received his information from a former Marine who was associated with Terrell and also
directly from Terrell.
14.An August 23, 1988 Washington Post article mentioned that Terrell had been indicted along with Mario
Calero and other Contra supporters for violations of the U.S. Neutrality Act. A July 14, 1989 Washington
Post article reported that a federal judge had dismissed the Neutrality Act charges.
15.On June 12, 1991, U.S. Embassy Manila reported a plot to assassinate a rebel military leader involving the
Philippine Foreign Secretary, Raul Manglapus, and an American. Key evidence of the plot was reportedly a
tape recording of a purported discussion of the assassination plot between the Foreign Secretary and the
American. An October 8, 1991 cable identified the American as Jack Terrell.
16.An October 9, 1991 draft DoS cable stated that DoS officers had met with the FBI on October 8 and were
told that the American involved in the plot:
. . . has been an asset of the FBI in a number of cases. When polygraphed in connection with this
case and asked whether the other voice on the tape was that of foreign secretary Manglapus, his
response was described as indicating deception (this tends to confirm our initial judgment that this
affair is a hoax of some kind.)
17.An October 17, 1991 Foreign Broadcast Information Service translation of a Manila Broadcasting Company
report stated that Foreign Secretary Manglapus:
. . . strongly denied the television news report implicating him in an attempt to assassinate [the]
rebel leader. ["]The charge is categorically false, and I have not plotted to kill anyone, and I have
not paid money to anyone to undertake matters on my behalf.["] According to Manglapus the
source of the story came from [sic] Jack Terrell, an ex-convict with questionable credibility.
Manglapus admitted that he got to know Terrell during an occasion at the International Center in
Washington, where Terrell said that he was working. . . . Terrell went to Manila to meet him but he
was not aware that he was already terminated from the International Center.
18.An October 17, 1991 U.S. Embassy Manila telegram to the DoS described a meeting between Manglapus
and the American Ambassador. According to the telegram:
While Manglapus was in exile in the United States, he was associated with the Center for
Development Policy. . . . The American behind this present story, Terrell, came to Manila about
two years ago purporting to represent the Center for Development Policy. He informed Manglapus
that he was a shrimp trader. Manglapus admits that he unwisely took Terrell into his home and
confidence. He failed to check out Terrell's credentials. He has done so since through an American
lawyer and understands that Terrell has a prison record, having served eight to ten years "in
Alabama" for armed robbery. Manglapus also notes that Terrell perjured himself in some matter
related to Contra affairs.
19.A column in the October 25, 1991 edition of the Manila Inquirer reported an interview of Terrell's Manila
neighbor who had said:
. . . Jack [Terrell] was by his own account a colonel in the US Army who served in Vietnam and in
Guatemala. He knew more about the Iran-Contra affair than did Col. Oliver North who was
accused of selling military equipment to Iran to raise funds for the Contra rebels. Jack was
forbidden to testify because he knew too much, and was liable to spill the beans on the American
high officials. And he was in the Philippines to be out of the reach of US investigators.
He claimed to be a scion of a wealthy Southern family with interest in the railroad line. Disowned
when he refused to enter the family business, he joined the US Army which became his second
family, and was due to retire in two years. . . .
He left [the Philippines] to join the war in Iraq, fearful on not surviving it, saying that he had to go
because he did not want to lose his retirement pay. . . .
In 1992 Terrell wrote:
I've lived this life and it didn't count.
. . . . My sister said to me: "You have lived a lie."
Appendix B
Frank Castro
1.Background. No evidence has been found to indicate that Frank Castro was a member of the Contras .
However, information has been found connecting Frank Castro to the Contras and cocaine trafficking. An
April 20, 1990 memorandum provided background information on Castro. The memorandum noted that a
biographic questionnaire, in Spanish, asked Castro "in what military service, including the 2506 Brigade (Bay
of Pigs) have you participated?" According to the memorandum, Castro answered that he had participated in
U.S. Army training at Forts Knox, Jackson and Carson and that:
. . . .
21. . . . because of this question being answered, a misconception took place and it was reported in
Castro's file, that he was part of the 2506 Brigade. According to the files of this Directorate, [Frank
Castro] did not work for the CIA during the Bay of Pigs Invasion, nor has he ever been an
employee of the CIA in any capacity . . .
2.Eulalio Francisco Castro Paz was born in Cuba on June 4, 1942 and came to the United States, probably in
1961, seeking political asylum. He served in the U.S. Army from November 5, 1962 through December 6,
1963. He changed his name to "Frank Castro" and became a naturalized U.S. citizen sometime during 1971.
In the early 1970s, Frank Castro was involved in anti-Fidel Castro activities that included bombings and
attempted bombings of Cuban and Soviet facilities.
3.During the 1970s and 1980s, CIA cooperated with the FBI and other U.S. law enforcement entities in
monitoring and reporting on Frank Castro's movements and activities. By 1983, Castro's name began to
appear in regard to Contra-related activities.
4.Allegations of Drug Trafficking. According to an October 12, 1983 cable:
On October 8, Frank Castro . . . revealed FDN interest in opening FDN front in Costa Rica,
separate from ARDE. Castro . . . . [said] the FDN would be willing to provide info[rmation] on
where they might establish bases, individuals they can trust, how they can operate without
interference from [the Government of Costa Rica], etc.
5.In November 1983, according to a document captured by U.S. military forces in Panama City in December
1989:
Frank Castro, a Cuban, is Pastora's assistant in his drug trafficking business. This Cuban has a
group of combatants who pretend to be "Contras," but in reality work for the FSLN in Nicaragua
(and Pastora knows it).
According to a November 22, 1983 DO memorandum, OGC had asked for a search of DO records for
information concerning Castro. The memorandum noted that Castro was being prosecuted in Texas for drug
trafficking, and DoJ had asked CIA about Castro's claims of affiliation with CIA. A handwritten, unsigned,
undated note filed with the DO memorandum stated, ". . . DoJ is willing to drop [sic] if he was in fact
associated [with] Agency."
6.On July 12, 1984 Headquarters responded to a cable that requested information concerning Castro. With
regard to drug trafficking, the Headquarters cable stated:
In 1979, Frank Castro was local drug trafficker and no longer involved in the anti-Castro
movement. In 1981 [Castro] was arrested by Miami police on narcotics charges and in October
1982 was out on bond awaiting trial. Also in 1982 [Castro] was under court order not to leave Dade
County, Florida.
Also on July 12, 1984, a cable noted that:
Popo Chamorro had picked up a considerable amount of money in Santo Domingo that has been
contributed to [Pastora's] movement. He did not say how much or from whom the money originated.
A handwritten note on the cable indicated "Frank Castro?"
7.On October 12, 1984, a cable reported that:
When queried ... about who controls "Rene," (a Cuban-American who has approximately 30-40
armed Nicaraguan combatants deployed in northern Guanacaste [Province], Costa Rica) [it was]
acknowledged that Frank Castro of Miami controlled "Rene". . . . All available information
indicates that the group under Rene's command is not presently associated with either the FRS or
MDN/ARDE. Previous reporting indicated that approximately seven Cuban Americans were
deployed with this unit which previously (early June) was located at "Monico," [Hull's] [landing
zone].
8.According to an October 25, 1984 cable, John Hull said that Frank Castro had donated two helicopters, two
light aircraft and one C-47 to the FRS. The cable suggested that the C-47, then located in El Salvador, might
be the one that Marcos Aguado had at Ilopango and might be under Dominican Republic registration.
According to the cable, Castro had moved from Miami to the Dominican Republic and recently provided an
unspecified amount of money to the FRS. John Hull says that, according to Cuban-Americans, Castro gave a
lot of money to the Contras and was rumored to be involved in the drug business.
9.On October 31, 1984, a cable reported that:
. . . personnel from the FRS, recently in Miami, had contacted Frank Castro and [another non-U.S.
individual], the latter reportedly is closely associated with Sarkis G. Soghanalian. Castro was
reported as having "connections" in Colombia and the Dominican Republic, and was presently
located in the [Dominican Republic].
10.According to a cable on December 10, 1984 it has been
commented that Frank Castro of Miami . . . continues to support Rene Corvo and his 40-60 man
unit. Although no details were available, [it was] commented that Corvo may be involved in drug
trafficking operations, supported by Castro.
11.A December 12, 1984, cable reported that:
. . . .
2. . . . Frank Castro, a Miami-based Cuban American with ties to anti-Sandinista guerrillas, is
installing or attempting to install a cocaine processing laboratory in northern Costa Rica. Castro is
exploiting widespread paramilitary activities in northernmost Costa Rica as a cover for drug
trafficking. [Reportedly] . . . Castro sent [an individual], Castro's middleman, to Costa Rica to
purchase a ranch (finca) with landing strip near the Nicaraguan border. Reportedly involved with
Castro and [this individual] is Rene Corvo, whose independently led anti-Sandinista paramilitary
activities in northern Costa Rica and southern Nicaragua were subject of [a previous report]. [It is]
said Corvo reportedly traveled briefly to Colombia following Corvo's return to Costa Rica [on or
about] 29-30 Nov from Miami. [It was] inferred that travel to Colombia might be drug-related.
3. Request [Headquarters provide information concerning] Castro, [the individual cited above] and
Corvo. There are no [local] traces on [this individual] or Corvo. Castro appears [in files] as
anti-Communist Cuban American well-known in the exile community in Miami and also known to be
involved with the anti-Sandinista struggle. . . . We would be particularly interested in knowing latest
info[rmation] linking Castro to drug trafficking.
12.A December 15, 1984 draft intelligence report to Headquarters included a "source comment" that:
There are also fears that Corvo, who has received support from Frank Castro, may be exploiting
the military infrastructure in northern Costa Rica as cover for engaging in drug trafficking. Castro,
a Cuban-American based in Miami and well-known as an anti-Communist, may be involved in drug
trafficking as well.
13.A February 8, 1985, cable reported that an FBI Special Agent had questioned Moises Ruiz Nunez:
. . . about ties between [John Hull] and Frank Castro, who has a reputation among
Cuban-Americans as an anti-Communist, a right-wing terrorist, and a drug trafficker. [Nunez] told
[the FBI Special Agent] that [Hull] knows that Castro should be avoided.
This was followed by a February 27, 1985 cable in which John Hull was discussed. In part, the cable said
that a CIA officer "does not believe that [Hull] is involved with Frank Castro in any narcotics trafficking
activities."
14.A June 1, 1985 cable referred to Frank Castro as a known narcotics dealer and requested details linking
Pastora to Castro, Jorge Morales and a third individual. A June 17, 1985 response to the request provided
information about Castro's involvement in drug trafficking in 1979, the "considerable" amount of money that
possibly came from Castro in July 1984 and the FRS' receipt of a number of aircraft from Castro in October
1984.
15.A January 2, 1986 cable responding to an FBI request for information concerning Frank Castro reported that
Castro was a pilot and gave Castro's most recent address as the Bonnet Travel Agency in Hialeah, Florida.
The cable also provided a recapitulation of CIA information concerning Castro's anti-Fidel Castro activities.
16.On March 7, 1986, an FBI cable reported to CIA allegations by Jack Terrell that, some time before
February 1985, Frank Castro had presented himself as the representative of Colombian drug trafficker
Ochoa who wanted a U.S. Ambassador assassinated and who offered to pay one million dollars to have it
done. The cable noted also that Castro was the main liaison between Colombian drug dealers and the
Cubans.
17.On April 15, 1986, a cable suggested that a review of certain reporting would show that some:
. . . consider Rene Corvo and Frank Castro as dangerous and counterproductive in the
anti-Sandinista endeavor, however anti-Communist both may be. . . . [There have been] reported
allegations that Castro may engage in drug trafficking. [Certain people] shun [Pastora], while
Corvo and Castro have continued to support him.
18.In a November 5, 1986 cable, a specifically named individual was referred to as "a Cuban narcotics dealer . .
. [known] to have frequent contacts with Rene Corvo and with one Frank Castro, a narcotics kingpin with
alleged Sandinista connections."
19.In a February 10, 1987 cable to CIA regarding information about Carlos Lehder-Rivas, the FBI reported
that Frank Castro was considered to be a narcotics trafficker, mercenary and a person who would do
anything for money. The cable also noted that Castro was the subject of a Miami narcotics case and that
Castro's break from the anti-Fidel Castro movement was consistent with the ideology of Lehder-Rivas who
was pro-Fidel Castro.
20.A February 13, 1987 FBI cable to CIA Headquarters provided background information on Frank Castro,
his father, brothers and other associates. With regard to Castro, the cable said that:
. . . In 1981 he was arrested on four counts of [sale, delivery] and importation of narcotics (case was
dismissed); . . . Castro pled guilty to carrying a concealed weapon, [adjudication withheld] fined
[$]500.00. In 1983, Castro was [subject] in DEA case [involving conspiracy], importation of 425,000
lbs. of marijuana . . . Beaumont, Texas. Castro was also the main subject in the Miami Police
Department Tick-Tock case in 1981.
Frank Castro is a potential subject in the Rene Corvo; et al; neutrality matter . . . where allegations
have been made by several individuals that Frank Castro, along with Francisco Chanes . . . plotted
to assassinate U.S. Ambassador Lewis Tambs in early 1985. . . . The allegations are that Frank
Castro, as drug king Jorge Luis Ochoas [sic] representative, offered several individuals who are
subjects in the above investigation, one million dollars, if they killed Ambassador Tambs.
. . . In 1983 he was the leader and main supporter of another paramilitary training group operating
in Naples, Florida. The group trained dozens of Nicaraguans and anti-Communist Cubans who later
travelled to Central America to combat the Sandinista Nicaraguan government.
Frank Castro was also one of the founders and main supporters of the Miami Cuban and
Nicaraguan group named the Saturnino Beltran Commandos operating near the Costa
Rica/Nicaragua border area. Unsubstantiated allegations have been made that Castro and others
have used this Contra camp as a front to traffic drugs between Colombia and the United States.
. . . Castro has very good connections with [the] Medellin Cartel Ochoa brothers. Castro is also
known to travel [frequently] between Miami, Costa Rica and the Dominican Republic. Castro has
[opened] a food processing [plant] in Costa Rica. Miami Police Department detectives believe
Castro may be currently addicted to cocaine.
[Another individual], a.k.a. "El Nino," . . . former subject in the MPD Tick-Tock drug investigation
and current part owner of [a] Travel Agency . . . is a close associate and partner of Castros [sic].
[He] . . . is a pilot and resides [in] Hialeah, Florida.
21.A November 25, 1987 cable noted:
. . . that DEA/Miami requested a meeting . . . . to discuss the development of case involving Frank
Castro and [a specifically named] Cuban exile. . . . These individuals also figured in a narcotics
case involving Cuba. Both men claimed to be working under the direction of [CIA]. Station assured
DEA that we were not in any way involved with these persons.
22.Information Sharing with Other U.S. Government Entities. As explained above, CIA collected and
shared information concerning Frank Castro with various U.S. law enforcement entities before, during and
after the 1980s. No records have been found to indicate that CIA shared the information it collected
concerning Castro with Congress.
Appendix C
To what extent did CIA have information indicating that the Government of Nicaragua, the Government
of Cuba, or Nicaraguan- or Cuban-sponsored individuals were involved in alleged drug trafficking
activities of individuals associated with the Contras?
1.No information has been found to indicate that either the Government of National Reconstruction (GRN) or
the Government of Cuba (GOC) was involved in drug trafficking activities with individuals associated with the
Contras. CIA reporting concerning drug trafficking by the GRN and the GOC during the 1980s concerned
the use of Nicaragua and Cuba for the transshipment of drugs to the United States. None of the reporting
linked any Contra organization or Contra member with such activities.
2.Allegations of Drug Trafficking. A September 23, 1982 cable reported that Interior Minister Tomas
Borge Martinez was interested in making some sort of arrangement with a bank in Panama. Interior Ministry
official Federico Vaughan took $350,000 with him to Panama for deposit in the Bank Continental. It was
suspected the money and the arrangement with a bank in Panama were both related to drug trafficking.
3.An October 8, 1982 cable to Headquarters reported that U.S. fugitive Robert Vesco and Interior Ministry
official Paul Atha had said in early October 1982 that the GRN was planning a drug smuggling operation to
earn cash for the GRN Ministry of the Interior (MINT).
4.An October 9, 1982 cable to Headquarters reported information that the nine member GRN Junta had
approved a plan for narcotics operations in July or August 1982. Reportedly Interior Minister Tomas Borge
Martinez would organize and direct the operation with U. S. fugitive Robert Vesco acting as his advisor.
According to this report, the GRN was laying the groundwork through trusted collaborators in Colombia,
Panama and Costa Rica.
5.A December 4, 1982 cable to Headquarters reported that the GOC was involved in planning possible
narcotics shipments from Colombia to Corn Island in the Caribbean. This report identified Interior Ministry
officials Paul Atha and Federico Vaughan as involved in the drug smuggling scheme. A December 9, 1982
cable to Headquarters indicated that Atha had said that Corn Island airstrip and El Bluff, Nicaragua would be
used for drug air shipments. Managua airfields, would be used for emergencies and "decoy flights."
6.A February 1, 1983 cable to Headquarters reported that Atha and Vaughan went to Panama with $380,000
to deposit in a specifically identified bank. The deposit was reportedly the product of drug operations by
Borge, Atha and Vaughan. The cable said that it was surmised that "higher GRN officials know about Borge's
drug activities."
7.A May 26, 1983 cable to Headquarters reported rumors concerning cultivation of marijuana on the
Nicaraguan Atlantic Coast and shipment to the United States. The cable stated the idea was credible and
consistent with the GRN's desire to damage the United States in any way possible through drug trafficking.
8.A June 30, 1983 cable to Headquarters reported that GRN Vice Minister of Aviation Marco Salinas Pasos,
FSLN Party official Jose Talavera, Cuban Ambassador Carlos Diaz, and a Cuban Intelligence Officer were
involved in a drug trafficking conspiracy with Colombian drug trafficker Jorge Morales and a Haitian exile. It
was reported that Salinas had agreed to arrange the purchase of a DC-6 in Managua for use in transporting a
drug shipment from Colombia to the United States.
9.A December 30, 1983 cable to Headquarters reported that Federico Vaughan and Paul Atha intended to
come to San Jose to introduce a person to cocaine dealers so that person could be the go-between for
buyers and sellers. Reportedly Vaughan said "The idea is to flood the U.S. with cocaine to the detriment of
the imperialist youth while proceeds will help the Nicaraguan revolution." Vaughan also reportedly indicated
that the GRN wanted to buy a ranch in Costa Rica with a landing strip to receive shipments of cocaine.
Vaughan, Borge, Atha, and the Cubans reportedly used a codebook to encode messages regarding cocaine
trafficking.
10.An April 3, 1984 cable to Headquarters reported information that Paul Atha and Tomas Borge were still
involved in delivering drugs to Corn Island as of April 1984.
11.Cables dated April 28 and May 3, 1984 to Headquarters reported that the drug operation described in June
1983 involving Salinas and the purchase of a DC-6 apparently never occurred. The cable further indicated
that there had been reporting beginning in April 1984 that a Salvadoran Farabundo Marti National Liberation
representative in Managua, Jacinto Bustillos, and GOC Ambassador Diaz were involved in a drug trafficking
conspiracy with Jorge Morales and the GRN leadership.
12.On December 11, 1984, a cable to Headquarters reported that a Nicaraguan defector who had worked for
the GRN Front company H&M believed that Atha and Vaughan were involved in drug trafficking because of
the large amounts of dollars they handled without any apparent source. Atha was the Managing Director of
H&M and Vaughan worked directly for him.
13.A July 19, 1985 cable to Headquarters identified a Cuban-American as the General Counsel for COPA
airline in Managua and a long-time friend and attorney for Atha. According to the cable, the Cuban-American
had commented that Atha "has gone very far into highly dangerous activities that include the smuggling of
drugs."
14.A September 27, 1985 CIA "Narcotics Report" stated that there was confirmation that Minister of Interior
Tomas Borge was involved in smuggling cocaine from Colombia to the United States via Nicaragua.
Reportedly this was a secret known only to Borge, his assistant Franco Montealegre, the Chiefs of Police and
State Security, and members of the National Directorate. Reportedly the Ministry of the Interior (MINT)
became involved in drug trafficking in order to obtain money for clandestine operations by Intelligence and
State Security Departments outside Nicaragua.
15.A typewritten Note for File, dated November 4, 1985, indicated that a former MINT officer had stated that
H&M officials were former State Security officials or Sandinista policemen whose loyalty was unquestionable
and that both Borge and Atha were extremely corrupt individuals.
16.In a February 27, 1986 cable to a number of Latin America Stations, Headquarters reported the former
MINT officer's statement that Tomas Borge was directly involved with Colombian narcotics traffickers who
used Nicaragua as a transit point for distributing drugs throughout the world. The Headquarters cable
indicated that the officer claimed that Borge made arrangements with GRN Customs officials to ensure that
selected aircraft coming from Colombia were not subjected to searches. The officer believed the income from
narcotics operations was used to finance espionage operations. He testified to Congress in 1986 that
Sandinista officials supported drug trafficking to earn foreign currency for espionage operations.
17.An August 8, 1986 cable to Headquarters reported that, in a 1982 meeting of MINT personnel, Borge
commented that drugs seized in Nicaragua would be used as a "strategic arm" against the United States.
According to Borge, this use of cocaine seized in Nicaragua would bring foreign currency to the Government
and it would cause chaos within the United States. Further, Borge reportedly stated that the United States
would be too occupied attempting to stop the drug traffic to be able to meddle in Nicaragua's affairs.
18.A November 8, 1988 cable to Headquarters forwarded a FBI Miami Field Office request for comment
concerning information provided by the FBI relating to a 1984 agreement between Colombian Medelin Cartel
drug traffickers Carlos Lehder Rivas, Pablo Escobar Gaviria, Jose Gonzalo Rodriguez Gacha, and the GRN
by which they would be allowed to stay in Managua, establish a base of operations, and be secure from
Colombian and U.S. authorities. According to the cable, the FBI information indicated that $3 million had
been turned over to Tomas Borge by the cartel leaders as consideration for the agreement. The cable also
reported that a number of drug smuggling operations took place at Los Brasiles airport.
19.The November 8, 1988 cable further reported to Headquarters that the cartel used the services of Robert
Vesco in October or November 1984 to gain GOC approval to overfly Cuba with drug shipments. Raul
Castro reportedly was involved in the agreement. The cartel established a scheme to transship drugs through
Corn Island and Cuba to San Andros Island, Bahamas with all communications concerning impending drug
shipments made by secure means between the GRN and the GOC to prevent any disclosure of their
association with the Colombian traffickers. The operation came to a halt sometime in early 1985.
20.An April 20, 1989 cable to Headquarters reported statements attributed to a former assistant to Paul Atha in
H&M. The former assistant reportedly stated that the MINT was involved in early 1989 in supporting
Borge's front company in transshipping drugs from Colombia through Corn Island, Nicaragua to the
Bahamas.
21.A July 7, 1989 cable to Headquarters reported information provided by a GRN defector. According to him,
a GRN officer stated in mid-1984 that the MINT had accommodated international drug traffickers from the
Medelin cartel in a MINT safehouse in Managua. He also reportedly had stated that the GRN contact point
for the drug traffickers was Paul Atha and that the GRN was involved in international drug trafficking targeted
at the United States. The report also indicated that "drug trafficking would support revolutionary goals and
was a means to an end," i.e., to improve the dire economic situation in Nicaragua and weaken the United
States.
22.CIA Response to Allegations of Drug Trafficking. Information received by CIA throughout the 1980s
alleging that individuals associated with the Cuban and Nicaraguan Governments were involved in drug
trafficking appears to have been broadly shared with other U.S. Government entities. This was accomplished
through intelligence reports that were disseminated by CIA to Intelligence Community agencies and in finished
intelligence publications that were disseminated more broadly. For example:
On April 15, 1983, LA Division disseminated an Intelligence Report to all Intelligence Community
agencies reporting that the GRN, as of late September 1982, planned to purchase drugs in Colombia
for eventual resale in the United States. The report stated that Tomas Borge, Nicaraguan Interior
Minister, would organize and direct the drug smuggling operation and American fugitive Robert Vesco
would act as his advisor. The report was disseminated to the FBI, DEA, Treasury, Customs, DIA,
DoS, and NSA.
On March 8, 1984, a DI analysis reported that drugs were to be shipped from Cuba to Nicaragua for
onward transport in a Nicaraguan ship and delivery to the United States. The article conjectured that
the GOC and GRN might be motivated to facilitate drug trafficking in order to obtain hard currency.
An October 9, 1984 CIA DI analysis, titled "Nicaragua: Involvement in Drug Trafficking," reported
that:
There is a growing body of evidence that high-level officials of the Sandinista government have
been conspiring with Colombian drug traffickers to smuggle cocaine from Nicaragua into the US. . .
. Despite recent publicity on Nicaragua's role in the drug trade and indictments issued in the US
against [Federico] Vaughan and some of the other key participants, the prospect of hard currency
earnings probably will keep the Sandinistas involved. This could result in a serious setback for US
law enforcement and drug interdiction efforts.
An October 1984 DI Intelligence Assessment summarized CIA and DEA reporting that supported a
conclusion that high level Nicaraguan Government officials had conspired with Colombian drug
traffickers to smuggle cocaine from Nicaragua into the United States. The Assessment specifically cited
Tomas Borge as probably directing the operation, with at least the tacit approval of the Sandinista
National Directorate and the Junta. The report was disseminated to the DoJ, DEA, Treasury,
Customs, DoS, and NSA.
A December 1984 National Intelligence Council Interagency Intelligence Memorandum titled, "Cuban
Government Involvement in Drug Trafficking," stated that the GRN and GOC were working together
in facilitating the shipment of drugs from Colombia to the United States.
23.Information Sharing with Other U.S. Government Entities. As explained above, much of the intelligence
regarding alleged drug trafficking by the Sandinista Government was shared with other U.S. Government
intelligence and law enforcement agencies. This was accomplished by dissemination of intelligence reports and
finished intelligence products.
24.On April 6, 1984, CIA provided a response to questions posed by the SSCI concerning Nicaraguan
involvement in drug trafficking. The response indicated that, although uncorroborated reports indicating
Nicaraguan involvement in shipping cocaine to the United States had been received, CIA was unable to
confirm reports implicating high-level Sandinista leaders in drug trafficking at that time.
25.On August 9, 1984, the National Intelligence Officer for Narcotics provided the DCI with summaries used to
brief Congress concerning narcotics activity in Cuba and Nicaragua. The summaries described field reporting
that indicated Nicaragua had been used as a transit point for the shipment of drugs into the United States,
possibly for the purpose of obtaining hard currency for the GRN. The summaries also provided information
regarding cooperation between Cuba and Nicaragua in plans for the processing and shipment of narcotics
purchased from Colombian drug dealers.
26.On March 16, 1988, CIA Deputy Director for Intelligence Richard J. Kerr testified before the House Select
Committee on Narcotics Abuse and Control that the Nicaraguan Government may have been involved in
narcotics activity to obtain hard currency. He cited the 1984 DEA sting operation that resulted in the
indictment of Federico Vaughan, an aide to Interior Minister Tomas Borge, as a co-conspirator in a scheme
to smuggle drugs into the United States.
27.According to a May 3, 1988 Memorandum for the Record prepared by OCA, Dewey Clarridge--who
served as Chief of DO/Latin America Division from 1981 to 1984--was interviewed by two Staff members
of the House Judiciary Committee's Subcommittee on Crime regarding his knowledge of drug trafficking by
the Nicaraguan Government or the Contras. Clarridge, the MFR reported, discussed CIA's assistance to the
1984 DEA sting operation.
Appendix D
Potential Disinformation and CIA-Contra Drug Allegations
Were there indications of foreign government efforts in the 1980s to promote allegations that Contras
were engaged in drug trafficking?
1.In 1985 and 1986, the Sandinista Government made a variety of claims that CIA or the Contras were
connected to drug trafficking:
In 1985 Nicaraguan Foreign Minister D'Escoto had complained to the Costa Rican Foreign Minister
that Eden Pastora was building airfields which were to be used for narcotics trafficking to support his
group.
In October 29, 1985 discussing the First Ladies Drug Conference, the Nicaraguan newspaper El
Nuevo Diario had said that "if Mrs. Reagan, in reality, with honesty, attempted to combat the
distribution of drugs," she should prevent the CIA from providing drugs to the Contras, drugs that
"unleash [the Contra's] bestial actions" against indefensible citizens and children.
On November 8, 1986, the Foreign Broadcast Information Service reported translated excerpts from
a speech by Sandinista leader Daniel Ortega that included allegations of CIA involvement in
drug-related airstrips at Ilopango, El Salvador; Aguacate, Honduras; and Nicoya, Costa Rica.
The Nicaraguan Ministry of the Interior (MINT) announced on November 23, 1986 that their
investigations had uncovered a "vast net of drug traffickers' backed by the FDN, MISURA and 'the
mafia'".
A December 3, 1986 review of Sandinista media stories stated that El Nuevo Diario on November
28 carried an article titled "Contras Drowning in Drug Trade." The article reported that La Nacion of
San Jose had "revealed" that the Secretary of the Conservative Party of Nicaragua, currently residing in
Costa Rica, was connected with the shipment of "100 million dollars worth of cocaine" to the United
States.
2.In the mid-1980s, Contra drug allegations were also featured in foreign publications outside Nicaragua. The
U.S. Government agencies that reported these allegations, in many cases, attributed them to various
Communist Parties, the Soviet Union and Cuba and mentioned a planned propaganda campaign involving the
CIA-Contra drug theme.
In a February 4, 1986 cable titled "Possible Disinformation re Contras," a cable informed
Headquarters of an article in the January 9, 1986 issue of the West German illustrated magazine Der
Stern asserting that the Contras, while being supported by the U.S. Government, were also financing
their efforts through drug trafficking. The article reportedly commented on the apparent irony of
President Reagan accusing the Nicaraguans of drug trafficking in 1985 if it were true that the United
States was supporting drug-financed Contra activities in 1986.
A February 5, 1987 cable describing a pro-Soviet political action campaign by the French General
Confederation of Labor (CGT) notified Headquarters that the French Communist Party had instructed
the CGT to begin a pro-Soviet political action campaign that included among its themes U.S. support
for drug trafficking by the Contras.
A story in the February 15, 1987 issue of a Tanzanian newspaper that was attributed to the Cuban
newspaper agency, Granma, reportedly alleged that U.S. Government officials and CIA had diverted
funds from the sale of narcotics to help fund the Nicaraguan Contra forces.
In a May 4, 1987 program summary of Radio Moscow Spanish language transmissions to Chile, the
Foreign Broadcast Information Service Station included an item that cited the U.S. Congress as
reporting that the "war against the Sandinist[a] regime is . . . paid with drugs."
An August 6, 1987 cable notified Headquarters of an "anti-[U.S. Government]" article in the
Athens-based PASOK Party weekly Exormisi on August 2, 1987 titled "Drug Smuggling as a
Method for Exercising Foreign Policy," and including quotations from an Italian publication L'Unita
that alleged drug smuggling to be the source of funds for the Contras. In response, Headquarters noted
that "L'Unita is a mouthpiece of the Italian Communist Party."
A October 31, 1987, Headquarters cable noted a report on Soviet trade union activities in the
international labor movement that noted that the Soviets were making a major effort to influence and
control labor organizations worldwide "in order to use them to support Soviet foreign policy objectives
and to further the aims of World Communism." Headquarters also stated that the French CGT had
rejoined the World Federation of Trade Unions and had begun its new propaganda campaign including
Contra-drug trafficking, at Soviet and French Communist Party direction.
A September 15, 1988, cable mentioned articles in Bolivian newspapers were alleging that drug
traffickers in Huanchaca, Bolivia were receiving protection from the U.S. Government and that the
drug profits were being used to finance the Contras. Another cable on September 17, 1988 stated that
a press service that was distributing the same articles in Rome was thought to have "long-standing
Cuban links." In a September 29, 1988 telegram, the U.S. Embassy in La Paz reported to the
Department of State (DoS) that the son of Bolivian drug trafficker Roberto Suarez was also spreading
the Huanchaca allegations. An October 7 cable mentioned "[the] likely Cuban-sourced disinformation
that [the U.S. Government] is narco-trafficking in Bolivia to fund the Contras."
Appendix E
Allegations by Tony Avirgan and Martha Honey of CIA and Contra Involvement in Drug Smuggling
1.Allegations of Drug Trafficking by CIA and the Contras. Anthony Avirgan and Martha Honey were
husband and wife journalists and U.S. citizens. Avirgan was present at the press conference of Eden Pastora
at La Penca, Nicaragua on May 30, 1984 where a bomb exploded. Avirgan and Honey asserted in the
media that the perpetrator of the La Penca bombing was a right-wing, Libyan-origin terrorist who they said
was named Amac Galil or Ahmed Khalil, and who used the identify of the Danish journalist, Per Anker
Hansen. According to Avirgan and Honey, the terrorist was tied to the drug-financed "Secret Team" of FDN
Contras and CIA agents. A June 5, 1984 cable to Headquarters reported that Martha Honey had "verified"
that an individual at La Penca named Per Anker Hansen was there using false identification papers.
2.An August 27, 1985 cable notified Headquarters that Hansen, a Danish citizen whose passport had been
used as identification by the attempted assassin, had been affiliated with organizations sympathetic to "South
America" for several years.
3.According to media articles, between August 1985 and April 1987, Avirgan and Honey publicized their
version of the La Penca incident and of a drug-financed CIA-Contra "Secret Team" in press articles and
appearances in Norway, Denmark, The Netherlands, Spain, the United Kingdom, India, Uruguay,
Nicaragua, and the United States, as well as in Costa Rica. In an article entitled "The Carlos File," published
in the October 5, 1985 edition of The Nation, Avirgan and Honey cited a specific individual--Carlos Rojas
Chinchilla--as the source of allegations linking the CIA-Contra "Secret Team" with drug trafficking. The
article stated that Rojas said he was in contact with an individual named "David," who allegedly was a driver
who had been killed by John Hull and buried on Hull's ranch. Rojas was later arrested by Costa Rican
authorities in August 1987 and at that time made a statement that "he made-up the 'David' story. . . . in return
for a payment of $10,000." Avirgan and Honey also published their allegations in 1985 as a book titled La
Penca: Report of Investigation.
4.Legal Actions Resulting From Drug Trafficking Allegations. Between 1985 and 1994, Avirgan and
Honey were involved in several U.S. and Costa Rican legal actions as a result of their allegations of a
CIA-Contra team of drug-financed secret operators with John Hull as their common focal point. The earliest
was a libel suit that John Hull filed against the couple in Costa Rica in response to their 1985-86 press
allegations. On April 11, 1986, Headquarters was informed of the Christic Institute's interest in this case. The
suit was scheduled for final arguments on May 23, 1986.
5.In May 1986, Daniel Sheehan filed a civil action, Tony Avirgan and Martha Honey, Plaintiffs vs. John
Hull, et al., Defendants, in the U.S. District Court for Southern Florida, under the sponsorship of the
Christic Institute. The May 29, 1986 complaint in what became known as the "La Penca Case" charged 30
individuals--including John Hull, Rene Corbo, Felipe Vidal, Moises Nunez, and Adolfo Calero--with
conspiracy, injuries, battery, assault, intentional infliction of mental distress, and intentional interference with
the business of the plaintiffs. The suit charged the defendants used six criminal means to "effectuate the
unlawful objective of this Federal Neutrality Act Conspiracy."
6.Included among these alleged "criminal means" was a violation of Title 18, United States Code, Sections
1401, et seq., and 1952 [sic], to fund the equipping, arming, training, and supplying of members of a "foreign
military expeditionary force" by smuggling cocaine from the Republic of Colombia through Costa Rica into the
United States. The suit also alleged "one-dozen criminal overt acts committed by the Defendants. . . ." Three
of these alleged "criminal overt acts" involved drug trafficking or dealing with drug traffickers:
. . . .
4. The transportation and sale of thousands of kilograms of cocaine from the Republic of Colombia,
through Costa Rica on the land owned or managed by Defendant John Hull in Northern Costa Rica
into the United States, where it was sold and distributed inside and beyond the State of Florida;
5. The purchase of . . . lethal military equipment . . . the money for which purchases being obtained
from the sale of said cocaine inside the United States and said money being delivered for such
sales of military equipment inside the United States; and
. . . .
10. The conspiracy to bomb the United States Embassy in San Jose, Costa Rica, and to assassinate
Lewis Tambs, the United States Ambassador . . . for the purpose of obtaining a $1 million "bounty"
offered for the death of Lewis Tambs by Defendant PABLO ESCOBAR, a portion of which monies
would be used to fund the Defendants' criminal enterprise.
. . . .
7.In a June 6, 1986 cable, Headquarters characterized the proceedings:
On 29 May 1986 Daniel Sheehan filed a lawsuit captioned Tony Avirgan and Martha Honey v.
John Hull et al in the United States District Court of Southern Florida in which they asked for $24
Million in damages. This suit tracks the allegations contained in [an earlier cable] and was not
unexpected. The complaint is essentially a artfully [sic] woven story about alleged excesses of the
Nicaraguan resistance and its supporters in Central America with the La Penca bombing at its
center.
8.The May 29, 1986 complaint was amended twice. On December 12, 1986, Sheehan filed an affidavit that
represented his recounting of the "Secret Team theory" as a supplemental filing to the amended complaint.
9.On June 23, 1988, the presiding judge in the civil action signed an order granting summary judgments to the
defendants. On February 2, 1989, the Judge signed an order that granted the defendant's motions for costs
and attorney's fees for the defendants and stated:
After two years of protracted and extensive discovery of scores of witnesses across the United
States, Costa Rica, and elsewhere, the plaintiffs were unable to produce a single witness who could
state that the defendants exploded the bomb or were responsible for the assassination attempt. . . .
The attorneys for the plaintiffs, The Christic Institute, must have known prior to suing that they
had no competent evidence to substantiate the theories alleged in their complaint. . . . Based upon
the affidavit of plaintiffs' counsel, the plaintiffs were permitted to conduct two years of discovery.
This discovery failed to produce any admissible evidence regarding causation. . . . This abuse of the
judicial process requires that the plaintiffs make the defendants whole by paying the fees the
defendants have been forced to expend for attorneys in this action.
The Judge awarded the defendants a total of $1,034,381.36.
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