Whiteout

by Alexander Cockburn

  Posada arranged safehouses for the pilots who ferried weapons to the Contra bases and carried drugs back north to the United States on the return trip. He paid the pilots with cash flown in from banks in Miami and Panama and oversaw storage and transport of the weapons. In arranging the shipments of cash and weapons, Posada worked with another old Cuba hand, Luis Rodríguez, who ran a Costa Rican seafood company called Frigorificos de Puntarenas. This company had received more than $260,000 in State Department funds to provide humanitarian aid to the Contras, even though the US government had known since 1983 that the firm was little more than a front for Luis Rodríguez’s cocaine trafficking. Indeed, in 1984, the FBI notified the DEA and the State Department that they believed Rodríguez was funneling cocaine profits to the Contras.

  As DEA man Castillo began to compile reports on cocaine smuggling in El Salvador, he had an unexpected opportunity to alert Vice President George Bush to what was going on. Bush arrived in Guatemala City on January 14, 1986, and Castillo was among those at a US Embassy reception. Spotting Castillo’s badge, Bush asked what he was up to, and Castillo replied that he was investigating cocaine trafficking in El Salvador. He advised the vice president that “there’s some funny things going on with the Contras at Ilopango.” Bush, Castillo says, smiled at him knowingly and walked away.

  After Bush’s visit, Castillo assembled all his notes on Contra drug running and turned them over to his boss, Robert Stia, saying, “This is too big. It’s going to come back and bite us in the ass if we don’t report it.” Stia reluctantly signed the reports and sent them back to Washington. Months went by with no response from DEA headquarters. Castillo continued to dig and now developed a very useful informant in the person of Hugo Martinez, who was in charge of developing flight plans for the Contra resupply mission. Martinez told Castillo that most of the pilots ferrying arms from Ilopango to Contra camps in Honduras and Costa Rica were involved in the drug trade. He said that the pilots would brag about the fact that they worked for the CIA and that nobody could touch them. Martinez kept a list of the names of all the pilots he believed were running drugs on Contra missions. When Castillo ran the list through DEA computers he was shocked by the results: “Every one of them had a file,” Castillo said.

  In April 1986, Castillo got a cable from Bobby Nieves, a DEA man in Costa Rica. Nieves told Castillo that he believed cocaine was being smuggled from John Hull’s large ranch on the Costa Rican side of the border with Nicaragua to Ilopango air base in El Salvador. He advised Castillo to investigate goings-on in Hangers 4 and 5 at Ilopango. The cable concluded, “We believe the Contras are involved in narcotics trafficking.”

  Soon thereafter Castillo was approached by Robert Chavez, the State Department’s general counsel in El Salvador. Chavez explained his dilemma. As the man responsible for issuing visas to the United States, he’d been advised by the CIA to grant one to a Nicaraguan pilot named Carlos Alberto Amador. But, Chavez said, when he checked the files he’d found that Amador had a record for drug smuggling. What should he do? If he declined to issue the visa, he’d have the CIA on his neck. Castillo told him that of course he should refuse to grant the visa. In the end Chavez took this course. When the CIA duly raised a stink, Chavez said that he’d taken that action on the orders of Castillo. This was the moment, Castillo says as he looks back on the entire affair, that the CIA began to go after him seriously.

  It wasn’t long after this that Castillo got a visit from John Martsh, head of DEA operations in Latin America. “Cele, they’re coming after you because of the Contra thing and the reports you wrote. They’re trying to get rid of you, but they’re going to do it very discreetly.” Castillo didn’t back down. He went on compiling dossiers on Contra airplanes and pilots. His source at Ilopango, Hugo Martinez, had told him about a Contra pilot named Francisco “Chico” Guirola who had made frequent cash runs to top up Contra bank accounts in the Bahamas. Martinez also believed that he was carrying cocaine to air bases in Florida and Texas. In 1985 Guirola was arrested in south Texas with $5.5 million in Contra cash, presumed to be drug profits. “That was a Contra operation,” Castillo says. “He wasn’t jailed; he was merely deported and the money returned to him.” Guirola continued to work for the Contras in El Salvador.

  Another Contra pilot whom Castillo had his eye on was Carlos Cabezas. Cabezas’s role as a drug runner for the Contras has been detailed by the man himself in the CIA Inspector General’s report, published at the end of January 1998. In that report Cabezas, now living in Nicaragua, says he attended a December 1981 meeting at a hotel in San José, Costa Rica. At this meeting, Cabezas told the Inspector General’s staffers, the scheme was hatched to raise money for the Contras by selling cocaine. Present were Troilo Sánchez, Horatio Pereira, Julio Zavala, Zavala’s wife Dora Sánchez, and Cabezas himself.

  Cabezas says that Sánchez and Pereira first broached the idea of selling cocaine in California and cycling a share of the profits back to the Contras in Costa Rica. Zavala, the man who later had the $36,800 returned to him in the “Frogman” case in San Francisco, agreed to the plan and instructed Cabezas to serve as the go-between, collecting money from San Francisco street dealers and flying it back to Central America. Cabezas says his first money-raising trip for the Contras occurred in early 1982. He flew to San Pedro Sula in Honduras, where he met Pereira. Two days later, Cabezas says, they met a Peruvian who gave them several kilos of cocaine. Cabezas carried the cocaine back to San Francisco and distributed it to his network of street dealers, who sold it all within a few days. A week later Cabezas flew back to Honduras and gave Pereira $100,000 in cash for distribution to the Contras.

  After this shake-down run, Cabezas set up a network of Contra “mules” to bring cocaine back into the United States. Usually Cabezas’s couriers were airline attendants, who would carry one kilo at a time, concealed in woven baskets. Cabezas collected the baskets at the airport, sliced them open with an Exacto knife, extracted the cocaine, handed it out to the dealers and then collected the money from the sales. During 1982 alone, Cabezas remembers making more than twenty trips to Costa Rica and Honduras. He estimates that he delivered between $1 million and $1.5 million in cash to Sánchez and Pereira.

  Then, in late 1982, so Cabezas told the CIA investigators fifteen years later, Troilo Sánchez instructed him to deliver a shipment of cash to his brother Aristides in Miami. Aristides was a leader of the FDN. Cabezas told the Inspector General’s investigators that Aristides was “certainly aware that the money came from drug profits.” In early 1984, Cabezas says he went to Danli, a Contra camp on the Nicaraguan–Honduran border, where Horatio Pereira gave several thousand dollars to Contra commander Juaquin [CIA spelling] Vega. The money was used, so Cabezas says, to feed the troops and help support the families of Contra soldiers.

  In May 1982, Cabezas recalled to the Inspector General’s investigators, Pereira introduced him to a man called Ivan Gomez, who both Pereira and Gomez himself identified as the CIA’s man in Costa Rica. Cabezas recalled that “Gomez was there to ensure that the profits from the cocaine went to the Contras and not into someone’s pocket.” Cabezas claimed that he met Gomez on one other occasion in the late summer of 1982, at the airport in San José, Costa Rica.

  In 1997 the Inspector General of the CIA was obviously in an uncomfortable position when this smoking gun landed on his desk. Here was a Contra drug runner explicitly saying that a CIA man oversaw allocation of drug money for the Contras. The CIA’s internal watchdog also had to deal with the uncomfortable fact, as his own report conceded, that “a CIA independent contractor used Ivan Gomez as an alias in Costa Rica in the late 1980s.” The IG’s report says lamely that the description of Gomez given by Cabezas in 1997 was wrong. Cabezas said that Gomez was a fluent Spanish speaker with curly black hair and an athletic build. The IG report claims that “the physical description of the CIA contractor is significantly different – although the CIA independent contractor has curly hair and speaks fluent Spanish. He is much sh
orter and of a slighter build than the person described by Cabezas.” Thus the CIA tried to create a second Gomez out of the person Cabezas had seen fifteen years earlier on two separate occasions.

  Castillo’s last major target was a suspected cocaine-running pilot named Walter Grasheim. Castillo had been told by Martinez that Grasheim was flying drugs and weapons out of Ilopango. While Grasheim was away in New York City, Castillo and his men raided the pilot’s house in San Salvador. They discovered a cache of US-made weapons, including M-16 rifles, rocket-propelled grenades, night-vision goggles and a case of C4 explosive. “This guy was a civilian,” Castillo said. “He wasn’t supposed to have this stuff. But we also found that all of his vehicles had US Embassy license plates. We found radios and weapons belonging to the US Embassy.”

  Castillo drafted a warrant for Grasheim’s arrest, but his target was tipped off and never returned to El Salvador. Deeply angered, Castillo went off to see US Ambassador Edwin Corn Castillo demanded to know why the embassy was furnishing such equipment to a drug runner. Corr told Castillo, “This is a covert operation. It’s a White House operation. Stay away from it.”

  Soon after this exchange Castillo was suspended for three days and censured. The DEA’s John Martsh told Castillo that he had become “too close” to his informants. He also reprimanded Castillo for using bad grammar in his reports and said that if he sent any more reports dealing with Contra drug running, he should use the word “alleged” when referring to such activities.

  Castillo was still in the DEA in Central America when Senator John Kerry of Massachusetts launched his probe into allegations of the CIA’s involvement in drug running. Despite a parade of witnesses, including convicted drug dealers and associates of Eden Pastora and Manuel Noriega, the Kerry hearings received little attention in the mainstream press. Castillo said in 1997 that he believes it was easy for CIA defenders in the press to discount the Kerry probe because so many of its sources were compromised by their criminal records. “They never brought people like me in to testify. I was the special agent in charge of El Salvador. I did all the investigation, and they never contacted me.”

  Similarly, Castillo says that none of the Iran/Contra committee investigators ever talked to him. But in 1991 he did meet secretly with Mike Foster, an FBI agent hired as an investigator for the Iran/Contra independent counsel, Lawrence Walsh. Castillo detailed for Foster his knowledge of the Contra drug operations and recalls that Foster told him after their first meeting, “Cele, if we can prove that the Contras and Oliver North were heavily involved in narcotics trafficking it would be like a grand slam home run.” Foster filed what’s known in the FBI as a 302 report, recording his interview with Castillo. “Castillo believes that North and the Contras’ resupply operation at Ilopango were running drugs for the Contras,” Foster wrote. “Many of the resupply pilots were drug traffickers.”

  Three days after Foster’s report was filed, senior DEA officials contacted Walsh’s office and tried to smear Castillo. Foster was asked to re-evaluate Castillo’s credibility. The FBI man then wrote another memo to Craig Gillen, who was in charge of the “continuing investigations” part of Walsh’s probe. In the memo, dated October 10, 1991, Foster wrote that “Castillo provides a lot of new background information and some significant leads that I think should be pursued.” But the leads never were pursued, and Walsh’s office decided that the drug trafficking allegations were outside the mandate of the independent counsel.

  As for Cele Castillo, the failure of the Walsh probe was the last straw. He resigned from the DEA in December 1991, calling it “a corrupt agency.” Back in Texas, seven years later, he was trying to recover his old reports to the DEA by suing the agency under the Freedom of Information Act.

  Parry and Barger Break the Story

  The first major story linking the Contras to drug running was written by Associated Press reporters Robert Parry and Brian Barger. It saw the light of day only by accident. The two reporters had been working on the story for months, to the growing discomfiture of their editors. After the usual editorial roadblocks had been thrown up – continual rewrites, revisions, clarifications and so forth – the story was ready to go, but was then held by an embargo from the higher-ups in the vast wire service. Then a Spanish-language editor translated the story, overlooked the embargo, and put it out on the AP’s Latin American wire. On December 20, 1986, the story ran on front pages of Spanish-language newspapers throughout the world.

  Three days later, a watered-down version went out on the English-language AP wire and then, amid the Christmas holidays, probably the slowest news days and the least read papers of the entire year, the Washington Post carried what Robert Parry later described as a cut-down version of the story, with extra denials from the Reagan administration inserted by the Post.

  Even so, the compact story covered most of the bases and was a fine piece of journalism. “Nicaraguan rebels operating in northern Costa Rica,” Parry and Barger began, “have engaged in cocaine trafficking in part to help their war against Nicaragua’s leftist government, according to US investigators and American volunteers who work with the rebels.” The story linked drug smuggling to both Eden Pastora’s ARDE Contra group and the CIA-created FDN run by Adolfo Calero and Enrique Bermúdez. The story also disclosed that Contra leader Sebastian González Mendiola, head of a Contra splinter group known as the M-3, had been indicted in Costa Rica on drug charges.

  Parry and Barger had also got information that much of the Contra-related cocaine running in Costa Rica was being overseen by members of the Cuban émigré group Brigade 2506, notorious in Miami and originally underwritten by the CIA to attack Castro. The story cited a classified National Intelligence Estimate prepared by the CIA, which charged that Eden Pastora had bought a helicopter and $270,000 worth of weapons with drug profits. Finally, Parry and Barger reported that a member of the Colombian cartel had donated $50,000 to the Contras for their help in securing safe passage for a 100-kilo shipment of cocaine. Parry and Barger followed up this story with a series of reports on Contra drug running, financial malfeasance and political corruption through the winter and spring of 1986.

  The stories infuriated the Reagan administration, which lost no time in trying to shut off this embarrassing spotlight on its illegal activities. Early in 1986 an emissary from the Reagan White House contacted Parry and told him that his partner, Brian Barger, was a covert Sandinista propagandist. Parry was unimpressed. With the failure of this tactic, Elliott Abrams went after Parry. Abrams’s press secretary, Gregory Lagana, sought out select members of the Washington press corps and dropped smears on Parry as a biased reporter who was out to undermine the Contra freedom fighters. There were even accusations that Parry and Barger had poisoned North’s dog. (Iran/Contra investigators later cleared the two of the charges of dog assassination. North’s pet had actually died of cancer.)

  It turned out that North himself was deeply involved in the efforts to smear the two reporters. In his testimony to Iran/Contra prosecutors, Alan Fiers, the CIA man in charge of Latin America, said that North had enlisted the FBI’s Oliver “Buck” Revell to harass Parry. The prosecutors’ summary of their investigation was released in 1996:

  The only activity Fiers is aware of by anyone in the government to in any way influence this case was North telling him [Fiers] that he [North] was going to call Oliver “Buck” Revell at the FBI and have him “do some things.” Fiers recalls that on two or three occasions North told him he was having Revell either do something or not do something. Fiers thinks one of the calls from North to Revell was about North’s concern about him [North] being hounded by Bob Parry the reporter.

  When Parry contacted Fiers about this statement in 1997, Fiers told him, “That’s right. You were the enemy.”

  Nor did Barger escape harassment. In the spring of 1986 the reporter discovered that his house in Washington was under round-the-clock surveillance. He reported the stake-out to the D.C. police, who confirmed he was being watched but
refused to say who was involved.

  Inevitably, pressure came down from the AP hierarchy. In the late spring of 1986 Parry went to Washington Bureau chief Charles Lewis to request authorization to write a series of stories about North, the Contras and drugs. Lewis nixed the idea, saying, according to Parry, “New York [AP headquarters] does not want to hear any more about the drug story. We don’t think you should be doing any more of this.” A few weeks later Lewis extended his prohibition to any coverage by Parry and Barger of the Contra War itself. “Nicaragua isn’t a story any more,” Parry remembers Lewis saying. This was a bit like a desk editor in Miami telling a reporter that Cuba wasn’t a story any more, five months before the Bay of Pigs. In October of that year, Eugene Hasenfus’s plane was shot down and the Iran/Contra scandal burst open.

  It wasn’t long before Parry was out of AP and working for Newsweek. Barger joined CBS. But any journalist discomfiting the Reagan administration on the Contra War invariably found trouble, and Parry had similar difficulties with Newsweek. The pair’s signal triumph was to have gotten that original December story on the wires.

  The Kerry Report

  The main consequence of the Parry/Barger stories was the congressional investigation launched in April 1986 by Senator John Kerry of Massachusetts, by far the most energetic probe in the 1980s of US government complicity in the Latin American drug trade. As his chief investigator Kerry selected Jack Blum, who had some years of experience in this kind of work for Senator Frank Church’s Multinational Subcommittee, which had held some major hearings on corporate crookery in the late 1970s, most famously the Lockheed bribe scandal.