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CIA's Report on the Contras and Cocaine

by Frederick P. Hitz, IG CIA

Statement of Frederick P. Hitz

Inspector General, Central Intelligence Agency

Before the Select Committee on Intelligence United States Senate

October 23, 1996 Regarding Investigation of Alleged Connections Between CIA, the Nicaraguan Contras and Cocaine Trafficking in the 1980s

Chairman Specter, Vice Chairman Kerrey and members of the Committee, I appreciate very much the opportunity to appear and discuss the investigation my office has been asked to undertake into recent allegations that persons associated with CIA and the Nicaraguan Contra movement may have had some role in the introduction of cocaine into the United States. You have asked that I address the nature of the allegations, the scope of our investigation and the results of any relevant previous reviews conducted by CIA.

As you know, the recent controversy regarding these allegations began with a three-part series published by the San Jose Mercury News on 18, 19 and 20 August 1996, discussing the misdeeds of several individuals who have been implicated in cocaine trafficking in California. The series alleged that at least two individuals had applied their illegal profits to benefit the Contras in their armed resistance to the Nicaraguan Sandinista Government in the 1980s.

As several news organizations--including The Washington Post, The Los Angeles Times, and even the Mercury News itself--have pointed out, the series included no evidence to indicate that CIA played a role in the emergence of crack cocaine in America. Nonetheless, the Mercury News series quickly has come to be represented as having established that the CIA was responsible for the widespread availability and use of crack cocaine in Los Angeles, throughout Southern California and other American cities.

On 3 September 1996, Director of Central Intelligence Deutch wrote to me that he had "no reason to believe that there is any substance to the allegations published in the Mercury News." However, he requested that I initiate an immediate inquiry into the matter "because of the seriousness of the allegations and the need to resolve definitively any questions in this area." At that time, DCI Deutch also requested that I submit a report to him within 60 days containing our findings and conclusions.

In 4 September 1996 letters to several members of Congress, this Committee and its counterpart in the House of Representatives, DCI Deutch explained his decision to request an Inspector General investigation. He also stated that a review of Agency files, "including a study conducted in 1988 and briefed to both the intelligence committees, supports the conclusion that the Agency neither participated in nor condoned drug trafficking by Contra forces." Further, according to the DCI, the Agency never had any relationship with the two individuals alleged by the Mercury News to have funneled drug trafficking profits to the Contras. Also, the DCI stated that the Agency had never sought to have information concerning these individuals withheld in a drug-related prosecution of a third individual as alleged in the Mercury News.

We also recognized the seriousness of these allegations. Thus, we reacted quickly to the DCI's request by organizing an initial team of three Investigators, an Auditor, a Research Assistant, and a Secretary to conduct a preliminary review of the scope and nature of the issues involved. That team developed, and I transmitted to all Agency components, a 12 September 1996 request for comprehensive searches of all Agency records systems regarding a broad range of relevant subjects. The request also called for the components to designate specific personnel who would be individually responsible for certifying to the thoroughness of those searches. We also published a Bulletin to all Agency employees explaining the nature of our investigation and asking that they provide us with any relevant information in their possession.

The search request extended to any and all documents and information, regardless of its form or sensitivity, relating to: (1) any CIA connection with a number of specific individuals; (2) any possible drug trafficking and related activities by the Contras or associated persons; (3) what action CIA took in response to such information; and (4) any contacts with federal, state, local, or foreign law enforcement entities in regard to these individuals and activities. Because of the DCI's request for a report within 60 days, we established a deadline of 18 September 1996 for the components to provide our office with copies of all responsive documents and information. It has since become apparent that there is absolutely no chance we will be able to meet anything like a 60- day deadline.

The size of the information base that must be thoroughly reviewed by the Agency components in order to respond to our request is enormous. For example, our team has reviewed over 5,000 cables that were identified in our own preliminary and limited electronic search of the Agency's cable data base. We have just received our first several hundred documents from the Directorate of Operations in response to our request and have been advised that 5-10,000 electronic records are in the final stages of review for relevance to our tasking, while over 350 boxes of files have been recalled from Agency archives and must be manually searched for responsive records. Additional searches are underway in the Directorates of Aministration and Intelligence, the Offices of Congressional Affairs and the General Counsel which have provided only very limited responses so far. We have been told that a search of the same records base in the 1980s at the request of the Iran- Contra Independent Counsel took two years and the efforts of 50 to 60 Agency personnel.

While we are attempting to tailor our requests as much as possible, the bulk of the information that is responsive to our request will not even be received by my office for at least two weeks. Thus, we remain in the preliminary stages of our investigation.

Soon, we will face the requirement to review, catalogue and digest substantial amounts of information in order to move into the interviewing phase. In anticipation of this requirement, we have assigned three additional Investigators, an Independent Contractor and another Research Assistant to our team. Another Auditor and two Inspectors will be joining the team shortly as well. I am prepared to assign such additional resources as may be needed to conduct a thorough and timely investigation. We have also had preliminary discussions, and are looking forward to working closely, with the Justice Department Inspector General and his staff since it is obvious that there will be several areas where our investigative interests and jurisdiction will overlap and complement each other.

While we do not have much substantive insight at this point, I can describe what we have learned from the limited documentation provided to us thus far regarding the Agency's position when similar questions were raised in the late 1980s. According to these records, in early 1987, the State Department requested that the Agency review all available information relating to the possible involvement of the Contras in drug trafficking. The 21 January 1987 paper that resulted was described as coordinated through the Intelligence Community and with DEA. It began: Review of information available to the Intelligence Community gives no indication that anti-Sandinista groups that have received or now are receiving support from the US Government have engaged in drug trafficking to fund their operations. Some allegations of "Contra" involvement in drug trafficking have surfaced over the past few years . . . DEA and FBI officials, along with Intelligence Community leaders, however, say no credible information exists to support such allegations.

The paper went on to discuss allegations regarding certain individuals that had been received and acted upon by the Agency.

Just over a year later, on 28 March 1988, then-Deputy DCI Robert Gates sent a memorandum to the Agency's Deputy Directors for Intelligence and for Operations asking for a briefing concerning "Contra involvement in narcotics-related activities to include any pilots involved in the resupply effort who may have had past or current (sic) ties to narcotics-related activities." He indicated in this memorandum that he wanted to be "fully informed on the facts" because "so many" questions and allegations were being raised about these subjects. The memorandum also suggested that "there may be some merit in setting all of this down on paper for the record--perhaps to be provided to both the [President's Intelligence Oversight Board] and to the Oversight Committees (of the Congress]." According to the memorandum, the briefing was to include "specifics and comprehensiveness."

This request appears to have produced at least two written responses. One is an undated and unsigned paper entitled, "Allegations of Resistance Activities in Narcotics Trafficking." It begins by stating:

All allegations implying that the CIA condoned, abetted or participated in narcotics trafficking are absolutely false. The Agency constantly checks for any evidence of drug smuggling by Nicaraguan Resistance members and any person or entity found to be involved in such activity must be separated from the resistance. In addition, the Agency has consistently informed the Congressional Oversight Committees of any Resistance drug activities in briefings and in written responses.

The paper then goes on to describe a variety of allegations as to specific individuals and how the Agency responded to each.

The second apparent response is a 31 March 1988 memorandum to DDCI Gates entitled, "Pilots, Airplanes and Shipping Companies Used in the Resupply Efforts That May Have Had Past or Current Ties to Narcotics Related Activities." This memorandum was prepared by the Central America Task Force which was responsible for managing the Agency's program in support of the Contras. It begins as follows:

During the past several years there have been numerous allegations in the media that pilots and airline companies that the Agency has used in the resupply effort of the Democratic Resistance have been involved in narcotics activities. To our knowledge no pilot or crew members have engaged in il

 
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