by Nick Schou
The fact that Lister—just a “con artist” in the words of the LA Times—was on speaking terms with retired CIA agents is weird, to say the least. But Lister had even more unusual friends. While researching “Dark Alliance,” Webb had discovered that Lister apparently was meeting with a retired CIA covert operations chief. Lister’s employee, Christopher Moore, who told Webb he met face to face with D’Aubuisson, said that before leaving for El Salvador, Lister met frequently with an executive at an Orange County construction company—a man whom Lister claimed was an ex-CIA official.
“I can’t remember his name, but Ron was always running off to meetings with him, supposedly,” Moore told Webb. “Ron said the guy was the former deputy director of operations or something, real high up there. All I know is that this supposed contact of his was working at the Fluor Corp., because I had to call Ron out there a couple of times.” As Lister and Moore prepared to travel to the war-wracked country, Lister told Moore that they’d be “protected” on the trip.
In the raid on Lister’s house, deputies found a handwritten list of his business contacts. Next to Scott Weekly and Roberto D’Aubuisson was the name Bill Nelson. When Sheriff’s detectives interviewed Lister about Nelson in 1996, he claimed Nelson was a vice president for security at Fluor Corp. That would be a distinct understatement. In the early 1990s, David Corn of the Nation magazine had interviewed William E. Nelson for his book, Blond Ghost, a biography of CIA agent Ted Shackley. Nelson knew Shackley because before he joined Fluor Corp., Nelson was the CIA’s deputy director of operations.
Nelson died of natural causes in 1995, so there was no way to ask him why his name was in Lister’s notes. It wasn’t until six years after Webb published “Dark Alliance” that I received heavily censored FBI records about Lister and Nelson in response to a 1997 Freedom of Information Act request. The records confirmed that Lister and Nelson had an eight years business relationship. The exact nature of that relationship remains unclear, because the FBI refuses to release uncensored copies, arguing that to do so would jeopardize U.S. national security.
But what is clear from the heavily redacted records is that, in 1985—while Lister was still laundering drug money to the contras and providing weapons to Blandon—the FBI began investigating one of his international arms deals. The investigation somehow led to Nelson, who told the FBI he had recently stopped doing business with Lister after the latter got in trouble with the FBI. Nelson admitted calling other retired CIA agents on Lister’s behalf, but told Lister “nobody at the CIA can help you until you clear yourself with the FBI.”
Nelson also admitted that Lister had sought his advice before testifying before a grand jury. “He [Lister] then told of his meeting with the FBI and that he had been subpoenaed before the grand jury in San Francisco,” the FBI memo states. “He told Nelson he was terrified. Nelson said go . . . [Lister] admitted being stupid and that he had done a dumb thing. Nelson said [Lister] left and then called back after his grand-jury appearance and said he did really well.”
During his FBI interrogation, Nelson claimed Lister had also applied for a job with Fluor. “He was never offered a job,” the memo states. The FBI censored the next sentence, but the memo continues, “Nelson thought Fluor might be able to use his [Lister’s] company. Nelson said [Lister] started traveling overseas, Lebanon and Central America, and he always had some scheme that never materialized.”
In a late 1996 interview, Vandewerker told me Lister had also helped him apply for a job at Fluor. “For a while, I tried to get a job at Fluor when I stopped working, and I know Rich [Wilker] was trying to sell something to Fluor,” he said.
The fact that Nelson seemed to be a source of potential employment for ex-CIA agents like Vandewerker, not to mention a “con artist” like Lister, is ironic, given that one of Nelson’s final acts at the CIA was to recommend the agency terminate full-time jobs for agents who were “marginal” performers. “We owe these people a lot,” Nelson wrote then-CIA director George Bush in a 1976 memo. “But not a lifetime job.”
Although Lister escaped arrest during the 1986 raid on his Mission Viejo house, his coke dealing quickly caught up with him. Two years later, he tried to sell two kilos of cocaine to a prostitute he met at a Newport Beach boat party. The woman turned out to be a Costa Mesa police informant, and Lister ended up behind bars for the first time since he began working with Blandon and Meneses six years earlier. Two kilos was enough to land Lister in prison for years; instead he walked out of jail after only two days.
Lister had signed a deal with the Orange County district attorney’s office. After he told police about “boatloads” of marijuana off the coast of California ready for “offloading,” prosecutors let him go. But his new career as an informant was short-lived. The following year, San Diego police arrested Lister again, this time in connection with a local cocaine distribution ring.
Lister got out on bail, and got a job working with his friend Scott Weekly in San Diego. But Lister quickly came to the DEA’s attention during their investigation of Jose Urda, Jr., a Chula Vista accountant who was laundering money for the Colombian coke cartels. Urda told undercover DEA agents posing as Colombian drug merchants that his colleague, a San Diego car dealer, had met Lister in San Diego’s Metropolitan Correctional Center. After Urda requested his assistance, Lister agreed to help Urda launder $30,000 per day for his Colombian clients.
During their investigation, undercover DEA agents posing as Colombian traffickers infiltrated a meeting with Lister in Urda’s living room. Also present were a pair of actual Colombian dealers who wanted $500,000 back from Lister, who said he couldn’t return the cash because he had laundered it with the CIA’s help and didn’t want to arouse the bank’s suspicion. In fact, Lister bragged, he “used to transport multi-hundred kilos of cocaine from Cali, Colombia, to the U.S.” with the CIA’s help.
The Colombians weren’t impressed. The DEA agents in the room overheard one of them remark in Spanish that Lister was a “dead man.” Without blowing their cover, one of the agents told Lister he’d better find the money. According to a DEA report, “Lister replied that he had nothing to fear since he worked for the CIA.” The Colombians meant business, and Lister came close to regretting his bluster. On June 19, 1991, federal agents at an immigration checkpoint near San Diego nabbed a four-member cartel hit team that had been dispatched to kill Lister.
That year, a jury convicted Lister on drug-trafficking charges; he was sentenced to ninety-seven months in prison and sixty months of probation. Lister appealed, asserting that while an informant, he had testified before two federal grand juries about a “major Central American cartel” and his “activities in Central America concerning certain key figures from Nicaragua alleged to have been involved in the Iran contra scandal.”
In establishing grounds for a softer sentence, Lister told the court he had certainly run drugs, but he had also cooperated with the government. He claimed he gave prosecutors thousands of pages of documents and notes regarding his work for the CIA “from 1982 to 1986 and beyond, and I did it in detail, location, activity,” he said. “I gave them physical evidence, phone bills, travel tickets, everything possible back from those days—which most people don’t keep, but I do keep good records—to assist them in this investigation. They were excited about it.”
Lister got out of prison shortly after “Dark Alliance” appeared, and has rebuffed all efforts to be interviewed. While much mystery surrounds—and most likely always will surround—the exact nature of his ties to the CIA, what is certain is that he was more than simply a “con artist,” as asserted by the LA Times. Lister’s business deals with powerful Salvadoran officials, his role in supplying the contras with arms, his relationship to retired CIA officials, and his ties to Blandon and Meneses all suggest that the “Dark Alliance” drug ring had closer ties to the CIA then even Webb could have known.
SEVERAL MONTHS AFTER the CIA and Justice Department released their initial reports on “Dark Alliance,”
the CIA’s Inspector General released a second volume, a more wide-ranging probe of contra drug trafficking and an accounting of what the agency did—or as more often proved the case—didn’t do about it. The report’s chief admission: between 1982 and 1995, the CIA did not report drug dealing by its assets, under an agreement signed between the agency and the Justice Department. But the CIA got a jump-start on that policy when it came to the Nicaraguan contras. The agency knew as early as 1981 that one element of the contras “had decided to engage in drug trafficking to the United States to raise funds for its activities.”
The specific group in question was the 15th of September Legion, which at the time was led by Enrique Bermudez, the contra commander who met with Blandon and Meneses in Honduras and allegedly told them that “the ends justify the means” when it came to raising cash. Without mentioning Blandon or Meneses, the CIA report acknowledged that the agency knew that supporters of Bermudez were funding contra operations with drug money, and the CIA didn’t lift a finger to stop it.
The CIA also admitted that Ivan Gomez, the CIA agent Carlos Cabezas told Webb had supervised Meneses’ drug pipeline, was actually a pseudonym used by a CIA agent in Costa Rica. But the CIA claimed it could find no evidence that Gomez, who later left the agency because of his ties to drug traffickers, had ever met with Cabezas.
To its credit, the New York Times gave the CIA report front-page treatment. Walter Pincus of the Washington Post also wrote about the agency’s stunning admission, although not on the front page. He concluded, “the report contradicts previous CIA claims that it had little information about drug running and the contras.” But failing to mention that the CIA specifically suspected Bermudez and his supporters of drug trafficking, Pincus added that the report “does not lend any new support to charges of an alliance among the CIA, contra fund-raisers and dealers who introduced crack-cocaine in the 1980s in South Central Los Angeles.”
“Pincus writes off twelve years of official lies by the CIA as mere contradiction,” Webb argued in a letter to the editor of the Post. While the report did contradict previous CIA statements about the contras and drugs, Webb added that it also contradicted most of what the Post had reported about the issue for the past two decades. “Ordinary citizens can be jailed for such lawless conduct,” Webb wrote. “That your paper continues to minimize criminal behavior when the CIA engages in it is most peculiar.”
The LA Times didn’t even bother writing a story about the second CIA Inspector General report. Doyle McManus acknowledges this was a major failure by his newspaper. “The critics are correct that the LA Times did not give enough attention to the findings in the CIA’s Inspector General’s report about the agency’s failure to report information about drug dealing to law enforcement agencies,” McManus says. “We dropped the ball on that story.”
Former Kerry Committee prosecutor Jack Blum believes the LA Times and other newspapers intentionally downplayed the second CIA report because it vindicated the Kerry Committee investigation, which they had largely ignored at the time. It reminded Blum of the media’s tendency to put stories about Kerry’s investigation in the Saturday edition, deep inside the paper—or on “Saturday below the fold,” as he said at the time. “I think they were terribly embarrassed when the reports came out,” Blum says. “Those reports vindicated Gary Webb and our committee, so they buried it. The coverage was not spectacular. The adage of ‘Saturday below the fold’ was still in vogue.”
The National Security Archives’ Peter Kornbluh doesn’t think the CIA’s Inspector General report vindicated “Dark Alliance.” Although the uproar over Webb’s story finally forced the CIA to come clean about its protection of contra drug traffickers, most of the activities in the report had nothing to do with the people in Webb’s story. “I can’t say it’s a vindication,” he says. “It was good that his story forced those reports to come out, but part of what made that happen was based on misleading information.”
David Corn of the Nation magazine says the CIA report only “partially” vindicated Webb. “It didn’t vindicate his story,” he says. “It vindicated his interest in the subject and his belief that this was important and that something terribly rotten had happened.” Nonetheless, Corn feels that the reports contained “tremendous admissions” of wrongdoing by the CIA. “While Nancy Reagan was saying ‘Just say No,’ the CIA was saying, ‘Just don’t look,’ ” he says.
Corn is still amazed that the fact that the CIA finally admitted it had worked with and protected from prosecution Nicaraguan contra drug traffickers—and then lied about it for years—wasn’t a major scandal. “Here you have the CIA acknowledging they were working with people suspected of drug dealing and it got nary a peep,” he says. “I think in some ways that’s journalistic neglect—criminal neglect. In what definition of news is it not a front-page story that the CIA was working with drug dealers?”
ELEVEN
Exile
WEBB’S SEPARATION FROM his family while working in Cupertino—and his sudden exit from journalism shortly thereafter—precipitated a long slide into depression that would last the rest of his life. But at first, the experience brought him closer to his wife than he had been in years. Sue stood faithfully by her husband, and encouraged him to write a book that would allow him to do what his editors had refused to allow him to accomplish: publish everything he’d unearthed about the CIA, the contras, and drugs.
In the year that had passed since “Dark Alliance” had been appeared, however, the major publishing houses were no longer interested. Webb could scarcely find an editor willing to read his book proposal. After more than twenty rejections, he signed a deal with Seven Stories Press, an independent publisher that specializes in progressive books, including its annual “Project Censored” compendium of investigative stories overlooked by the mainstream media each year.
Dan Simon, publisher of Seven Stories Press, says the “Dark Alliance” controversy killed Webb’s prospects overnight. “The minute those front page stories ran basically trashing this guy nobody would touch him,” Simon says. “Nobody wanted anything to do with Gary Webb.” Unlike Webb’s editors at the Mercury News, who had mercilessly hacked away his series to fit it in the paper, Simon read Webb’s lengthy first draft, and encouraged him to write even more. “I told him this was his opportunity to put everything in there,” he says. “We used to talk at night from 8 to 11 PM, after he got home from work and we had a great time. It was a lot of fun. He was like a pig in mud.”
Simon saw Webb as a heroic journalist who had been castigated for writing a story that was ultimately vindicated by the CIA itself. Between the book’s 1998 hardcover release and its publication the next year as a paperback, the CIA had released its Inspector General report revealing that the agency had lied for years about its protection of Nicaraguan contra drug traffickers. “I can’t tell you how intensely excited he was about this,” Simon says. “The lesson to him was not only did everything he had said turn out to be completely vindicated by those reports, but it was clear to him he had actually understated the story. To the end of his days, Gary felt that very clearly the story was much bigger than he had realized.”
Webb wrote the book mostly at night and on the weekends. Shortly after leaving the Mercury News, he landed a job as a well-paid investigator for the California Joint Legislative Audit Committee. The position not only matched his previous salary and allowed him to continue to work in Sacramento, but was perfectly suited to his skills: Webb would spend the next several years uncovering government corruption and bureaucratic ineptitude in state government.
While writing his book, Sue says, her husband became distant. With three kids running around the house, and her husband writing all day, Sue found herself increasingly frustrated at the burden that came with trying to be a supportive wife. With even more determination than he’d put into his previous work, Webb had thrown himself into his new project. He was determined not to leave out anything, no matter how remotely significant, that woul
d help clear his name.
All the long hours he spent at the computer, reliving the excruciating experience he’d just undergone at the Mercury News, came with a certain emotional toll, however. Webb didn’t have any new discoveries to share at the dinner table. More often than not, he was still writing at dinnertime. Meanwhile, Webb had grown increasingly troubled, not paranoid exactly, but uncharacteristically concerned about his family’s security. He kept a gun stashed in his bedroom. The telephone would sometimes ring, but nobody was there. In the middle of a conversation, Sue would sometimes hear clicks on the line.
One evening, Sue noticed that her husband seemed especially quiet. When she asked him what was wrong, he told her that he’d met with a source that had said something that bothered him. “He was told that he’d be killed one day,” she says. The man had darkly suggested that it wouldn’t happen anytime soon, perhaps not until five or ten years in the future, and it wouldn’t be anything obvious. As an example, the man explained, one day Webb might be driving down a steep slope in the mountains and his brakes would fail. “I was pretty upset about it,” Sue says. “But Gary told me, ‘Oh, you can’t go around worrying about that kind of thing. It might happen, it might not, but I’m not going to go through my life worrying about it and looking over my shoulder all the time.’ ”
Dark Alliance: The CIA, The Contras, and The Crack Cocaine Explosion received mixed reviews in the mainstream press, but even critics acknowledged it was a much more nuanced and convincing, if vastly more complicated, work of journalism than his heavily-edited Mercury News series. Washington Post media critic Howard Kurtz, who had last written about Webb a year earlier when he was transferred to Cupertino—“the Mercury News has apparently had enough of reporter Gary Webb”—continued to heap scorn. “ ‘Dark Alliance’ is back,” he wrote ominously, adding that Webb had to settle for “a small [publishing] house” after receiving a “torrent of rejections.”