Part 3:Dark Alliance...."I Never send Cash,,,,God,Fatherland and Freedom

 Dark Alliance...The CIA,The Contra's and The Crack Cocaine Explosion
By Gary Webb 
4
"I never sent cash" 

Between July 1979 and March 1981, Somoza's exiled supporters had made little headway in putting together any kind of organized opposition. 

It wasn't for lack of trying. It was for lack of money. 

The Legion of September 15, the hundred or so ex-Guardia men hiding out in Guatemala—survived through thievery and contract killings. Another group of exiles coalesced in Miami, calling themselves the National Democratic Union (UDN), which had a small armed branch in Honduras called the Revolutionary Armed Forces of Nicaragua (FARN). Both the legion and this second group —UDN-FARN—tapped into Miami's Cuban community, drawing financial support and volunteers from the rabidly anti-Communist Cubans, including men who had worked with the CIA on the Bay of Pigs operation in the 1960s. 

The union of the Nicaraguan and Cuban exile communities in Miami was an obvious marriage. The Nicaraguans hated Daniel Ortega and the Sandinistas almost as much as the Cubans hated Fidel Castro. Castro had been giving the Sandinistas aid and comfort since the mid-1970s. After the war, Cuba provided key advisers to the Sandinistas on how best to beef up their own army and, most of all, their intelligence services. 

As the Cubans had learned from twenty years of covert war with the United States and the CIA, the best defense against subversion was information. Who were your enemies? Who were the infiltrators? What were they planning? 

The combination of the Cubans' advice and the Sandinistas' own experiences at the hands of Somoza's secret police led them to build an efficient and deadly secret police unit inside the Ministry of the Interior. 

The Sandinistas made it difficult for any organized opposition to take root inside Nicaragua. As a result, the Contras were forced to rely on help from outsiders—exiles, many impoverished by their flight, and foreign governments. The first donation of military supplies appears to have come from the Miami group UDN-FARN in the fall of 1980. Its members scraped together enough money to buy a couple boxes of rifles from Miami sporting goods stores and a little radio equipment, which was boxed up and mailed to Honduras. 

The crates were sent to the head of the Honduran national police, Gustavo Álvarez, an ardent anti-Communist who took up the Nicaraguans' cause. Álvarez saw that the guns from Miami got to the soldiers, who were still learning how to march and drill. 

Meanwhile, Bermúdez and other ex-Guardia officers with the Legion of September 15 made the rounds of South America's military governments, seeking donations to the cause. They found much sympathy but little cash. 

One of the places they visited was Argentina. At that time, Argentina's military dictatorship was one of the most brutal in the world, and its generals were regarded as pariahs even by other military regimes in Latin America. The generals there had a deal for them. 

A radio station in Costa Rica was broadcasting unpleasant news about the Argentinian military government, accusing it correctly, as it turned out—of murdering political opponents and nonpolitical citizens alike by the thousands, sometimes by dropping them out of helicopters or burying them alive. The radio station was getting on the generals' nerves. If the Nicaraguans were serious about fighting their way back into power, the Argentines said, a little demonstration of their sincerity might not hurt. Why didn't they try to put Radio Noticias del Continente out of the broadcasting business? 

The legion agreed to take care of the radio station and infiltrated a sapper team into Costa Rica, hitting the station about two in the morning on December 13, 1980. But the raiders didn't find the target quite as easy as they expected. Earlier Argentine military attempts to close it down—air-dropping drums of homemade napalm onto the station's roof, for instance—had caused the broadcasters to beef up their security. When the legion unit arrived, they found themselves attacking a pillbox. The raiding team was met by a hail of machine-gun fire and beat a hasty retreat, barely managing to toss a Molotov cocktail at a storage shed. Some were killed. On the way out the survivors were arrested by the Costa Rican police. All in all, it was a disaster. 

But the Contras got a lucky break from the American political system that November. Jimmy Carter—whom the Contras despised for abandoning Somoza—was beaten in the November elections. A new team was coming to town, a different administration led by Ronald Reagan and George Bush, and it had a different outlook on what was happening in Central America. 

When Reagan and Bush looked at Nicaragua, they didn't see a populist uprising against a hated and corrupt dictatorship, as did most of the world. They saw another Cuba taking root in their backyard, another clique of Communists who would spread their noxious seeds of dissent and discord throughout the region. And when they looked at the Contras, they didn't see the remnants of Somoza's brutal Guardia, or mercenaries doing hired killings and robberies. They saw plucky bands of freedom fighters. 

Things couldn't have been clearer. 

Within days of taking office, Reagan  froze all aid to the Sandinista government. In March 1981 he authorized the CIA to begin exploring ways of undermining the Sandinistas and halting their shipments of arms to rebel groups in El Salvador, with whom the Sandinistas were ideologically aligned. CIA agents fanned out across the United States and Central America to begin taking stock of the scattered pockets of anti-Sandinista groups. They also began doling out money indirectly, to help keep the shoestring organizations afloat financially. 

The Argentine military, which had been given the cold shoulder by the Carter administration, also noticed Washington's fresh new outlook. And they figured, quite correctly, that one sure way to get back into America's good graces was to help the Contras out. The next time the Contras came calling, in the spring of 1981, the Argentines were glad to see them, despite their bungled job on the radio station. 

"We were practically official guests," former UDN-FARN commander William Baltodano Herrera told an interviewer in 1984. "The government took charge of everything. We were driven everywhere, invited out everywhere and we didn't have to pay for anything." 

When it was time to go, the Argentines slipped Bermúdez's legion $30,000 and gave UDN-FARN $50,000, but Baltodano said the money "was just to cover absolute necessities. One can hardly build a movement with $50,000. We could pay for our trip with that money." 

By mid-1981 Argentine military advisers were secretly slipping into Honduras and Miami to teach the exiles how to run a guerrilla war. Dozens of Nicaraguans were also taken to Argentina for training at special schools there. Because of the secrecy attached, the Nicaraguans weren't let outside the safe house where their training was taking place. "It was in Buenos Aires, in a residential district about half an hour from Ezeiza airport," former Legion of September 15 member Pedro Javier Nunez Cabezas recalled in a 1985 interview. "The training was purely theoretical, there was no practical instruction. We were taught theories of espionage, counterespionage, interrogation techniques, beating techniques, how to lead troops and psychological warfare. . .. I didn't see anything of Buenos Aires." After the training, Nunez said, the legion "divided us up into working groups and handed out various assignments. A couple of the groups travelled to Miami." 

Working closely with the Argentine trainers were General Álvarez's Honduran police, which helped the CIA covertly funnel supplies to the fledgling Contra units. Once again, Norwin Meneses can be found lurking in the background. His nephew, Jairo, confessed to federal prosecutors that he'd gone to Honduras in 1982 on behalf of Uncle Norwin "to negotiate terms of an agreement with officers of the National Military Police." Under that deal, cocaine seized by Honduran authorities would be sold to Meneses, who would smuggle the drugs out in automobiles bound for the U.S. "Approximately 10 to 20 kilograms per month were imported in this manner," Jairo Meneses reported. If that little conspiracy between Meneses and the Honduran government ever resulted in an investigation by a police agency, it is not apparent in the CIA or Justice Department files released thus far. 

Outside Miami, Cuban Bay of Pigs veterans put up training camps for the Contras' new recruits and invited the press in to witness the Nicaraguans being drilled by former Green Berets. Other training camps were reported to have been set up in California and Texas, but little information about their locations and operations has emerged. 

For the most part, however, the Contras were still disorganized, barely qualifying as an army. When the CIA got involved in early 1981, its first project became uniting the various groups under one umbrella.As things stood, the bands were too small to be taken seriously as a military threat, and dealing with them separately was too difficult for the CIA. 

Enrique Bermúdez was persuaded to move his Legion of September 15 from Guatemala to Tegucigalpa, Honduras, where the CIA was sending in dozens of new agents and operatives. The agency pressured the Miami-based UDNFARN group to link up with Bermúdez's men and form a new resistance group, to add yet another degree of separation from past image problems that might detract from the freedom fighter persona the Reagan administration was creating. "The gringos made no secret of the fact that if we wanted support from them, we'd first have to join forces," said former legion member Pedro Nunez. 

The problem was that the two Contra groups hated each other. 

UDN-FARN's commander, Fernando "El Negro" Chamorro, was a rabble-rouser who had fought for the Sandinistas against Somoza and attained immortality by helping to shoot a couple rockets at Somoza's bunker from the roof of the nearby Intercontinental Hotel in 1974. He was also known to have a drinking problem and a questionable work ethic, and he hadn't managed well within the new Sandinista government. Eventually, he broke completely with the ruling Sandinistas and drifted down to Costa Rica to join his older brother, Edmundo Chamorro, another former Sandinista. Together the Chamorro brothers became the military leaders of UDN-FARN.

The Chamorros' Contra group, with its connections to the Miami Cubans, was actually further along in developing an organized, regional opposition force than Bermúdez's scruffy legionnaires. Though based in Costa Rica, UDNFARN had established a small military camp in Honduras at the Cuban-owned Hacienda El Pescado, just outside the capital city of Tegucigalpa. "At that time, the UDN-FARN had the best connections with the Honduran capital and with the Honduran military and government," said former UDN-FARN commander Baltodano. 

Baltodano's group wanted nothing to do with Bermúdez's brutish outfit, resisting the CIA's desire that it join forces with the legion. The Chamorros regarded many of the ex-Guardia men of the legion to be war criminals who could never win popular support back home. "The Legion was entirely composed of ex-National Guards. Naturally one couldn't make a big splash with that in Nicaragua," Baltodano said. There were also indications that Bermúdez was personally corrupt. In 1981 a group of legion officers voted to expel him from the organization for misuse of funds and lying. The mutiny was put down by Bermúdez's Argentine backers. 

The CIA eventually got its way. After top CIA officials met with their allies in the Honduran military, the Hondurans withdrew their support of the Chamorros' group and backed Bermúdez's legion instead. If UDN-FARN wanted to stay in the Contra business, it would have to merge with Bermúdez's ex-Guardia men. 

And if it didn't want to merge—well, it would merge anyway.

An odd kind of "unity" meeting was held in August 1981 in the upstairs rec room of the legion's rented safe house in Guatemala City. With an Argentine military officer looking on, Bermúdez signed a one-paragraph document stating that the Legion of September 15 and UDN-FARN "agree to join efforts and constitute a single organization that will be called the Nicaraguan Democratic Forces (FDN) in order to fight against the Sandinistas." 

The Chamorro brothers boycotted the meeting rather than sit in the same room with Bermúdez, which was fine with Bermúdez, who regarded the Chamorros as closet Communists. 

The legion moved to Honduras, and the FDN was officially born. Quickly the UDN-FARN Contras were pushed into the background and assigned to subordinate roles. The top jobs were filled by Bermúdez and his murderous crew from the Legion of September 15. "By choosing to support Colonel Bermúdez and the FDN over other Contra factions, the United States threw in its lot with the single most detested group of Nicaraguans," former New York Times reporter Stephen Kinzer, who covered the Contras, wrote in 1991. "American planners never seemed to grasp the simple fact that Nicaraguans hated the National Guard and would never support an insurgency directed by ex-Guardsmen." 

The CIA's role in the FDN's creation—hidden at the time —was spelled out by former FDN director Edgar Chamorro in an affidavit filed with the World Court in the Hague in 1985. Chamorro, a former advertising executive and distant relative of the UDN-FARN Chamorro brothers, said the CIA paid for the meeting, rented the building, and drafted the agreement. "The name of the organization, the members of the political junta and the members of the general staff were all chosen or approved by the CIA." 

As luck would have it, the CIA selected another one of Norwin Meneses's friends to assist Bermúdez in running the FDN: Aristides Sanchez, a wealthy landowner whose brother Fernando had been Somoza's last ambassador to Guatemala after Edmundo Meneses was assassinated. Another Sanchez brother, Troilo, had been one of Norwin's friends and business partners in Managua. And yet another brother, Enrique, was partners in a Miami restaurant with Danilo Blandón's "friend from Miami," Donald Barrios, the man Blandón claims introduced him to Norwin Meneses. 

Like Bermúdez, Aristides Sanchez went on the CIA's payroll and began reporting daily to his CIA overseers. Together, Bermúdez and Sanchez would become the heart and soul of the military side of the Contra organization. (The political side was left to CIA agent Adolfo Calero, the former manager of the Coca-Cola bottling plant in Managua, who also worked closely withAristides Sanchez. Oliver North later called Sanchez "Calero's hatchet man.") 

Though the FDN would change and merge with other groups over the years, the Bermúdez-Sanchez alliance stood unchanged, thanks largely to the backing of the CIA. "Sanchez became one of the Contras' top political and military strategists, plotting logistics, buying supplies and delivering weapons," wrote the Miami Herald in his 1993 obituary. Throughout the 1980s, Sanchez was consistently described in the press as the Contras' supply chief. Norwin Meneses explained that when he was buying and delivering weapons and supplies to the FDN, "I dealt directly with Bermúdez, and occasionally his assistant on minor things. I also worked with Aristides Sanchez. He was a very good friend of mine." 

By November 1981 the Contra project was far enough along that the CIA moved to make its sponsorship of the FDN official. President Ronald Reagan was presented with a document known as National Security Decision Directive #17, which served as a blueprint for the U.S. government's plan to overthrow the Sandinista government. It called for the CIA to conduct a variety of covert operations—military and political—against the Sandinistas and asked for $19.95 million to do it with. The document made it clear that it was only a start. "More funds and manpower" would be needed later. 

It was obvious to anyone that the CIA's $19 million wasn't going to go very far if a serious paramilitary operation was being planned. The paucity of the allocation, in fact, was used by former CIA deputy director Admiral Bobby Inman to ridicule a reporter's suggestion that the CIA was financing a Contra war machine. "I would suggest to you that $19 million or $29 million isn't going to buy you much of any kind these days, and certainly not against that kind of military force," Inman told a press briefing in 1982. 

The covert operations, according to Reagan's directive, would be conducted "primarily through non-Americans." In particularly delicate situations, the agency would send in UCLA's—Unilaterally Controlled Latino Assets—to do the dirty work. That way, if any of them got caught, Langley could throw up its hands and insist it had no idea what was going on. 

Reagan approved the intelligence finding, and in December 1981 he sent CIA director William Casey to present Congress with it, saying that the covert operations planned for Nicaragua were in the interest of U.S. national security. Under the law, a "finding" from the president and congressional notification was required if a major covert operation was being planned.

From that point on, the Contras were the CIA's responsibility. From late 1981 through most of 1984, the agency ran the show directly, doling out weapons and money, hiring subcontractors, ferrying supplies, planning strategy and tactics, and keeping tabs on its hirelings. As the Nicaraguans soon learned, their role was to fight and to obey orders. Someone else, usually an American CIA agent or an Argentine military trainer, would do the thinking for them. One order the Nicaraguans were repeatedly given was to vehemently deny any connection to the CIA. 

Bermúdez played that role to the hilt, angrily brushing off any press suggestions that the U.S. government had a hand in running the FDN. "We would never accept the role of American mercenary," Bermúdez huffed. 

Former FDN director Edgar Chamorro claimed that CIA advisers prepped them for their press conferences and told them to deny they had received any money from the U.S. government. "It was particularly important that we deny having met with any U.S. government officials," Chamorro recounted in his book Packaging the Contras. 

Blandón said that when he began selling drugs for the FDN in Los Angeles, he was aware the U.S. government had somehow become involved with his organization but saw no direct evidence of it himself. "Maybe in the principal office in Honduras they were helping, but, no, because we were being helped by the Argentina people at that time," Blandón said. 

To further insulate themselves from the Contras, CIA officials worked out a deal with the Argentine and Honduran generals. The Americans would supply the cash if the Argentines would supply the training and military advisers. The Hondurans would provide the clandestine bases from which the Contras would operate. As their part of the deal, both countries would get a lot better treatment—increased foreign aid and military support—from the U.S. government.

This tripartite agreement, however, did nothing to ease the financial woes of the Contra commanders. The $19 million in CIA money that Reagan had approved did not go to the Contras. In fact, they saw very little of it. Nearly all of that money was channeled through the Argentine military, both to preserve the CIA's "deniability" and to make sure the Argentines retained some semblance of control over the Nicaraguans. In essence, the CIA was paying the Argentine military to run its covert war. When the Contras needed cash, they had to go begging it from the haughty Argentines. 

"They handled all the money. The Nicaraguans—from Bermúdez, needing several hundred dollars for the rent on the Tegucigalpa safe houses, to a foot soldier on leave in the capital, asking for a couple of bucks to see a movie— had to get it from the Argentines," journalist Glenn Garvin, a Contra sympathizer, wrote in 1992. "That was just one of the ways, some subtle and some anything but, that the Argentines let it be known that they were in charge." 

While the Contras were forced to beg for scraps, the Argentines were being paid $2,500 and $3,000 a month, "some just for sitting around at a desk cutting up newspapers," said Argentine adviser Hector Frances. Frances described "multi-million dollar purchases carried out by the Argentinian advisors in Honduras. . .furniture, equipment, tools, and office equipment; million-dollar purchases from a pharmacy near the Hotel Honduras Maya. . .where in a few months, the owner made himself a multi-millionaire, and also multi-million dollar accounts rung up at the Hotel Honduras Maya, where the Argentinian advisors lived for almost six months, occupying nearly an entire wing of the hotel." That the Contras had to grovel for handouts from the high-living Argentines rankled mightily. And though the Americans had promised to start sending guns, ammo, and equipment, it would be nearly a year before those supplies began arriving.

It was against that backdrop that Meneses and Blandón had been called to Honduras to meet with Enrique Bermúdez, where they were told by the new FDN commander to raise money in California. It is understandable that they would have translated this to mean, by any means necessary. After all, crime had ensured the survival of Bermúdez's legion in Guatemala. 

And what was a little cocaine trafficking when compared to kidnappings and contract killings? 

Danilo Blandón's first illegal Contra fund-raising efforts met with the same lack of success as had his legal rallies and parties, he said; the two kilos Meneses had given him to sell weren't moving because he knew nothing about the cocaine business. 

"Well, it took me about three months or four months to sell those two keys because I don't know what to do," Blandón said. "Meneses told me, 'You go to—with two customers." That wasn't enough, you know? Because in those days, two keys was too heavy." 

Jacinto Torres, Blandón's large Nicaraguan car dealer friend, told the FBI that Blandón was unable to unload all the cocaine Meneses had dumped on him. "Torres stated that Blandón and the others only sold a few ounces of the two kilos to someone in the San Diego area. They gave the rest of the unsold cocaine to Raul Vega" (the one-eyed driver for Meneses who had helped train Blandón in San Francisco), the 1992 FBI report said.

"Mr. Meneses was pushing me every—every week, you know, 'What's going on?'" So Blandón said he had to turn to friends and acquaintances in the automobile business to cultivate customers. "I started getting some people," he said, but his cocaine deals were still small potatoes, selling only "ounces, ounces and grams at that time. . .. It's only for the money that we had to send. We start sending trucks, pickups, to the Contra revolution. We started sending clothes, medicines at that time." 

He told CIA inspectors that he bought a pickup truck and "filled it with medical supplies and radios and turned it over to others to drive to Central America. He says that the truck was, in fact, later used by the FDN in Honduras." Between 1981 and 1982, he said, he also provided several thousand dollars in drug profits to finance the FDN's wing in Los Angeles. The drug money "was used to support the operating expenses—plane tickets, rent, office supplies, etc." Meneses was doing the same, Blandón said, estimating his in-kind contributions at about $40,000. 

Most of the money he made from cocaine sales, Blandón said, was turned over to Meneses. How it got from Meneses to the Contras "was Meneses' problem, not mine. I give the money to Meneses. I bought some cars or whatever, some pickups, but the money, we gave him the money. . .. I bought a lot of things, but I never sent cash." 

Cash deliveries to the Contras, it turned out, were being handled by someone else—the unidentified Latin male whom DEA agent Sandra Smith had seen pick up two cocaine traffickers from L.A. at the San Francisco airport and drive to a modest row house in Daly City. And Agent Smith's gut feelings about the Meneses drug ring had been right on target. She'd discovered the first direct evidence of a Contra drug pipeline into California.

5

"God, Fatherland and Freedom" 

In the fall of 1981, before his troubles began, Carlos Augusto Cabezas Ramirez was living, breathing proof that America could still be the land of opportunity for anyone willing to roll up his sleeves and work. The chubby thirtyfive-year-old had always been willing to work his way to where he wanted to go. In Nicaragua, by the age of fourteen he was helping his mother support nine brothers and sisters. In 1970 he went to the United States, where he spent four years studying to become a commercial pilot, working nights as a janitor to support himself. He took his pilot's license back to Nicaragua and joined the National Guard, flying for Somoza's army and managing a crop dusting company on the side.

Later Cabezas enrolled in the National University of Nicaragua, got an accounting degree, and was hired by the Bank of America. He became head of the Managua branch's foreign division, supervising seven employees in the sleek blue-and-white skyscraper that was the country's only high-rise office building. He got a law degree next, becoming a licensed attorney in 1978 and setting up a practice in Managua. But the next year, when the Sandinistas were on the outskirts of the capital, Cabezas was recalled to active duty as a fighter pilot. An ardent anti-Communist, he was happy to defend Somoza's government against the Sandinistas. 

Near the end of the war, when the Guardia was desperately striking out at every perceived enemy, Cabezas took part in the terror bombings of the city of Masaya, something he still doesn't like to talk about. 

On July 15, 1979, four days before the shooting stopped, Carlos Cabezas caught the last flight out of Managua. He came to San Francisco, where his wife, three young daughters, his mother, his brothers, and his sisters were already living. With a family to support, Cabezas needed a job—fast. He hired on as a sales agent for the Lincoln Insurance Company in San Francisco. He also took a second job as a night janitor at San Francisco's Hilton Hotel. In 1980, after only a year on the job, the Lincoln Insurance Company named him Sales Agent of the Year. He was given a plaque with an engraving of Abraham Lincoln on it, a prize he still proudly shows off to visitors at his tiny law office in Managua.

By 1981 his hard work was paying off. He sold his car, his wife Angela sold some jewelry, and, throwing in some savings, they scared up $10,000, enough for a down payment on a small row house in Daly City. In just two years he'd gone from being a homeless refugee to owning a piece of the American dream. 

When time permitted, Cabezas did legal research for a couple of lawyers, mainly to keep his skills in tune. That work made him realize how much he missed the practice of law and the income that came with it. To be a lawyer in California, though, he would have to go back to law school and study for the grueling California bar exam. With a family to support, a $1,200-a-month mortgage, and two jobs, Cabezas couldn't think of any way to do it, until he thought of his ex-brother-in-law, Julio Zavala. 

Two years older and recently divorced from Cabezas's sister Maritza, Zavala had plenty of money. Once Cabezas had been at Zavala's house when a friend of Julio's named Nestor Arana came by lugging a suitcase. It was full of cash, neatly wrapped and stacked. Zavala told the goggle eyed Cabezas that part of his job involved taking money to Miami, and he was paying Arana to do it for him. Cabezas had asked if Zavala needed any help, but the inquiry was gently brushed aside.

The more Cabezas thought about it, the more it seemed that Julio Zavala was his ticket out of the dilemma he was in. If he could persuade Zavala to give him a loan, Cabezas figured he could quit his jobs long enough to go to law school and pass the bar. So in October 1981 he called Zavala and asked if he could come over and talk to him about an idea he had. Zavala said sure. And at that moment, Carlos Cabezas was screwed. 

The reason Julio Zavala had so much money is because he was a cocaine dealer, and a fairly busy one at that. He wasn't anywhere near Norwin Meneses's global perch, but few were. Zavala was solidly midlevel. He sold kilos and ounces to street-level dealers, who then sold grams to users. For several years he'd been buying directly from a Colombian in San Francisco and a Nicaraguan in Miami, picking up a kilo for around $54,000 and turning it over for up to $68,000, more if he ounced it out. Business had been good. The day Cabezas called him, however, Julio Zavala was a worried man. Bad things had been happening all around him, and he was starting to get nervous. 

His problems stemmed from some loose talk last spring in the lockup at the San Francisco County Jail. 

Local DEA agents had busted several people in South San Francisco for possession of a half-kilo of cocaine. One of the women arrested was a Contra fund-raiser named Doris Salomon. She and a codefendant, Lilliana Blengino, were cooling their heels in the jail when Salomon ruefully mentioned that the cocaine they'd been busted over wasn't even hers. It had belonged to her boyfriend, Noel. 

A month later, DEA agent Luis Lupin stopped by Blengino's house to see if she could be of some assistance to the authorities. Blengino didn't know much, she told Lupin, but Doris Salomon did say that she'd gotten the coke from her boyfriend, some guy named Noel. Lupin made a note of the name and filed it away.

When Salomon appeared in federal court five months later for a bail hearing, she made a passing reference to a boyfriend, a fellow named Julio Zavala. Agent Lupin, sitting in the courtroom, perked up. Could Julio Zavala be this "Noel" character that Blengino had told him about? 

The agent hurried over to the jail and asked to see the visitors' log for the time Doris Salomon had been there. Bingo. Julio Zavala had come to see her three times in a span of eleven days. Unless she had more than one boyfriend while she was in jail, Zavala had to be Noel, Salomon's source of supply. 

Checking with the San Francisco Police Department, Lupin discovered that Zavala, a Nicaraguan immigrant, was no angel. Just a month before Salomon was arrested, Zavala and another man had been nabbed trying to bust into a woman's apartment, allegedly to collect a drug debt from her husband. She called the police, and when the irate dealers were hustled out to the curb, the cops found five ounces of cocaine in the Cadillac that Zavala had parked outside. To be precise, it wasn't actually Zavala's Caddy—it had been stolen in Florida and presented to him as a gift from his Miami cocaine connection. 

Lupin noticed that the other man arrested with Zavala that day, Edmundo Rocha, had been one of those pinched with Doris Salomon a month later. And there in Rocha's wallet the police had found a slip of paper with "Julio 349–2790" written on it. It was a small world. The DEA started an investigation.

That was the way Zavala's luck had been going all year. 

He'd been busted twice, his girlfriend had been busted, his friend Mundo Rocha had been busted twice. The charges against Zavala had been dropped each time, but he didn't like the odds of it happening again. Zavala was moving a lot of cocaine. He had customers in Miami, Los Angeles, Chicago, and San Francisco. He was also making inroads into Oakland's black community, selling to a couple of African-American dealers there. Unfortunately, the growth of his business was making it increasingly difficult for him to disguise what he was doing. 

When asked, Zavala said he worked as a buyer for some supermarkets in Costa Rica, which helped cover his frequent travels to Miami and Central America. But that story didn't explain why the telephone in his apartment in San Mateo never stopped ringing, or the steady stream of people who came and went at all hours. What he needed to do was fade into the background for a while and lower his profile. Let someone else take the heat. 

So when Carlos Cabezas came around with his hand out, Zavala didn't give him the brush like the last time. This time, he listened. 

Cabezas told him of his plans to become a lawyer in the United States, "because I knew that there was no way for me to go back to my country since the revolution had taken over the power." He told Zavala that "in order for me to go to law school, I have to become a full-time student and I couldn't, you know, catch up if I was working two jobs." 

Zavala appeared sympathetic, and when Cabezas was through, he "said he was going to help me to finance some and support my family since I had to quit my job." He couldn't actually give him a loan, he said, but if it was time and money Cabezas was after, Zavala had a suggestion: Come work for me. He could make as much as he did at both of his present jobs put together, and then some. Plus, he could do it in his spare time. It was the perfect job for him. 

"He said I was going to be delivering cocaine and collecting money so he can stay a little bit cool," Cabezas would later testify. "At that time Mr. Zavala was having problems himself with some legal problems. And he said, 'I was lucky that the charge was dismissed and I don't want to get myself in this transaction, so I want you to work for me. I trust you. And then, you know, the heat is going, it would be off me for awhile.'" 

Zavala told Cabezas he'd pay him $500 for each kilo of cocaine he delivered, plus a percentage of the drug debts he collected. And there was an added bonus that Zavala knew Cabezas would like, given his former brother-in-law's feelings about the Sandinistas: some of the cocaine they sold would help to finance the Contras. 

So Carlos Cabezas, who'd been a lawyer, an accountant, a pilot, an insurance salesman, a banker, a janitor, and a crop duster, became a cocaine dealer for a while. 

At first he stayed around the San Francisco area, running errands, meeting Zavala's customers, delivering a few kilos here and there. The work was easy, Cabezas found, and the money was very good. One of his first errands had been to pick up a gold Toyota and drive it to the airport, where he was to meet a couple of Julio's friends from L.A. and bring them into town. Cabezas agreed to put them up at his house for the couple of days they would be around. 

That was when Carlos Cabezas first drew the attention of the federal government. 

As part of her investigation into the Meneses drug ring, DEA agent Sandra Smith was watching when Cabezas arrived at the airport to pick up the two L.A. dealers she'd been tailing. When Cabezas drove them back to his little row house in Daly City, 8 Bellevue Avenue was added to the government's list of potential wiretap locations. Within two months the FBI had joined the chase. Scattered among Zavala's customers, the bureau had at least four confidential informants who were giving them chapter and verse: when the cocaine loads were arriving, when the couriers were coming and going, how much cocaine Zavala and Cabezas were selling, how much money was leaving the country. The evidence that the two Nicaraguans were involved in a major cocaine trafficking network piled up fast. 

A recently declassified CIA Inspector General's report shows that the Agency had been wise to Zavala since 1980. That year a CIA operative reported that Zavala was supplying drugs to a Nicaraguan official who was a drug addict. The operative would keep the Agency apprised of Zavala's activities for years. In addition, the CIA has admitted that a relative of one of the people involved in the drug ring was working for the CIA at the time. 

To Zavala, blissfully unaware of the gathering storm, it seemed as if things were finally looking up. Hiring Cabezas had been a stroke of genius. The customers liked him. He was dependable, a hard worker, and would probably start bringing in some customers of his own soon. Zavala was so pleased with himself that he decided to take some time off and celebrate. His girlfriend, Doris Salomon, had jumped bail and was waiting for him down in Costa Rica, he told Cabezas. He was flying down to join her, and his plans were to get married and spend his honeymoon down in Central America. He told Cabezas he'd see him after the holidays, and off he went.

So, after just a month and a half in the business, Cabezas began running a major drug ring, doing Zavala's job as well as his own. He started dealing directly with Zavala's cocaine suppliers and keeping the books, his accounting background helping him to record the operation's income and expenses meticulously. 

Cabezas said the cocaine he and Zavala were selling came from two separate sources. One was Alvaro Carvajal Minota, a Colombian who lived in San Francisco. Carvajal was part of a ring of international cocaine dealers located in Cali, Colombia, a group that would later become known as the Cali cartel. By the early 1990s the Cali dealers would operate the world's biggest cocaine sales network, eclipsing the rival Medellín cartel in terms of power and money. But in late 1981 few in U.S. law enforcement circles were even aware of the cartels. Cabezas began making trips to Cali in 1982 to negotiate deliveries for Zavala. 

The other source, Cabezas said, was someone down in Costa Rica. That cocaine would arrive by courier via Miami and would sometimes be brought to Cabezas's house for safekeeping. 

Because each source had different prices and delivery costs, Cabezas kept two sets of books—one for the Costa Ricans and another for the Colombians—so everyone got paid what they were owed, without any mix-ups. The cocaine from Costa Rica was of a far higher quality than the Colombians' powder. It was Peruvian. And it was this cocaine, he said, that belonged to the Contras. He got proof of that in December 1981 when Zavala called him from Costa Rica and told him to catch a plane down. Zavala wanted him to meet some friends of his. The friends turned out to be two exiled Nicaraguans who were working with Norwin Meneses: Horacio Pereira Lanuza, a drug dealer and gambler known as La Burra (a female donkey), and Troilo Sanchez Herdocia, a playboy brother of FDN leaders Aristides and Fernando Sanchez. 

Fernando Sanchez had been Somoza's last ambassador to Guatemala, replacing the slain Edmundo Meneses. The U.S. State Department, in a 1988 publication, described Fernando as the Contras' "representative in Guatemala." Troilo Sanchez had been a partner of Meneses in one of Norwin's nightclubs in Managua, and was one of his drinking buddies. A pilot, Sanchez said he flew for the CIA in the early 1960s during preparations for the Bay of Pigs invasion, which was partly staged from Nicaragua. But by the late 1970s he was a hopeless drug addict, spending large sums of his family's fortune on heroin, cocaine, women, and gambling. The Sandinistas seized what was left, and Troilo Sanchez and his wife, Isanaqui, fled to Costa Rica, where they became partners with Meneses in a bean-processing factory there. 

"We are like family," Meneses said of Sanchez's wife in a 1986 interview. "She came many times to visit my brother Mundo, who was a general and the police chief of Managua and was later assassinated in Guatemala for the Sandinistas." 

Horacio Pereira had also been a business partner of Menses before the revolution. Meneses said they owned cattle and cattle ranches together and had known each other since childhood. Both were from Esteli, where Pereira controlled some gambling clubs. 

Cabezas told CIA investigators that his December 1981 meeting in Costa Rica "was the genesis of an effort to raise money for the Contras by selling drugs. Although the original reason for the meeting was purely social, Cabezas says Sanchez and Pereira raised the idea of selling cocaine as a means of raising funds for the Contras. Cabezas says Pereira and Sanchez discussed the idea with him because both knew of Cabezas' role in the Zavala organization. Although it was Sanchez's and Pereira's idea to raise funds for the Contras by engaging in drug trafficking, Cabezas says it was Zavala who came up with the idea that Cabezas serve as a go-between by collecting the money from street dealers and delivering it to Central America." Zavala and Sanchez have denied any involvement in drug trafficking for the Contras.

On January 23, 1982, Zavala sent Cabezas back to Costa Rica with two other men to pick up two kilos of cocaine from Pereira. But Pereira was suddenly uncomfortable with the arrangements. "I went down there with those two people to Costa Rica, but apparently Mr. Pereira changed his mind because he said he had some information that Mr. Zavala was drinking very heavily and he was scared that Mr. Zavala was going to misuse that money that supposedly he said that he was helping the Contra revolution in Nicaragua," Cabezas would later testify. Pereira told Cabezas that "he was representing the UDN-FARN and FDN in Costa Rica and that they had chosen Zavala's organization to sell the cocaine they were getting in from Peru. He said the money was going to the Contras and that the CIA would control the delivery of the money"

Pereira's information about his ex-brother-in-law was correct, Cabezas conceded. Zavala had been drinking quite a bit, and he was starting to neglect his responsibilities, falling behind in his payments to the Colombians, who were getting annoyed. His dicey relationship with them would be the source of several arguments, Cabezas said. Sometimes, when the Colombians were really pressing for money, Zavala would take some of the Contras' cocaine and sell it to pay the Colombians, which played hell with Cabezas's accounting. 

The wary Pereira suggested an alternative: He would deal directly with Cabezas. He would sell him the cocaine, and then Cabezas would become responsible for getting the Contras' money back to Costa Rica. But Cabezas was hesitant. "I explained to Mr. Pereira that I didn't have no clients and that if I have to sell the cocaine, I have to tell Mr. Zavala because I wasn't going to jump him," Cabezas later testified. "I wasn't going to do anything behind his back." 

But Pereira insisted that Cabezas had to assume responsibility for the cash, "because the money belonged. . .to help the Contra revolution," Cabezas said. That was the only way, Pereira told him, that he would let go of the cocaine. 

Cabezas called Zavala and explained the situation, and Zavala agreed to Pereira's terms. But Cabezas was no fool. Instead of his usual $500 per kilo payment, he wanted half of Zavala's profits, "because I am taking the responsibility of the money." Stuck, Zavala had no choice but to agree. In an interview with the CIA, Zavala confirmed that he was then cut off from Cabezas's dealings with Pereira and Sanchez. 

Cabezas traveled with Pereira to San Pedro Sula in Honduras, where he met other members of Pereira's family. While there, he said, he stayed at the home of Pereira's brother-in-law, an exiled Nicaraguan attorney named Francisco Aviles Saenz, who had been educated in the United States. He spent two or three days in Honduras, waiting for "a Peruvian who would be bringing drugs for shipment to the United States." Before he left, Pereira gave Cabezas a bottle of whiskey, some souvenirs, and two hand-woven baskets from Peru, saying, "This one is for you and the other one is for Julio." Baffled that there was no cocaine, Cabezas took the gifts back to San Francisco.

When he showed the baskets to Zavala, Cabezas said, Zavala exclaimed, "These are not gifts!" and began ripping them apart. As Cabezas watched, Zavala stripped the basket down to its internal framework and, from inside the frame, pulled out long, thin, waxy strings that resembled skinny candles. Taking a razor blade, he slit them open and poured out a small pile of cocaine powder. Cabezas said each "candle" held about three ounces of cocaine, and each basket contained about a kilo. 

Cabezas would later testify that he personally brought back twelve kilos from Pereira during the first part of 1982, earning about $17,000. He would tell CIA inspectors that "Contra mules, typically airline flight attendants" were also bringing the baskets into the United States, one kilo at a time. When the baskets arrived in San Francisco, it was Cabezas's job to dismantle them and extract the cocaine. How many kilos Pereira sent into the States is anyone's guess, but Costa Rican authorities claimed that he was the biggest cocaine trafficker in their country during the early 1980s. 

For the next year, Cabezas said, he and others made regular trips to Miami and Costa Rica carrying money for the Contras. He told CIA investigators that "on average. . .he carried $64,000 on each of his 20 trips to Central America, although he also claims that he and another person once delivered about $250,000 to Pereira and Sanchez." FBI records show Zavala made a money-hauling trip to Costa Rica in early 1982, and said the amount he was carrying was a quarter million dollars. The FBI was informed early on that the Contras were deeply involved with the drug ring. In February 1982 an informant reported that Zavala "had been making silencers and sending them to Nicaragua for the revolution." The same informant also reported that Contra leader Adolfo Calero, the FDN's political boss and a longtime CIA agent, "was definitely involved in cocaine traffic." (It appears, however, that the informant may actually have been referring to Calero's brother, Mario, a Contra supplymaster based in New Orleans who was repeatedly linked to drugs and thievery.)

An FBI teletype shows that by November 1982 the bureau—thanks to its wiretaps and inside informants— knew exactly what was going on inside Zavala's drug ring. According to the report, from the San Francisco FBI office to the FBI director in Washington, "Zavala's sources of supply of this cocaine are: Troilo Sanchez, Fernando Sanchez and Horacio Pereira. All three are operating out of Costa Rica." As for Cabezas, "Cabezas's sources of supply for cocaine have been established as Troilo Sanchez, Fernando Sanchez, Horacio Pereira of Costa Rica, Humberto and Fernando Ortiz of Colombia, Sebastian Pinel of Los Angeles and Alvaro Carvajal Minota of San Francisco." 
(Though the FBI didn't realize it, that cable exposed yet another L.A.-based Contra drug dealer, Sebastian Pinel. He first appeared in the CIA's files in late 1980, at the inception of the CIA's counter-revolutionary experiments. The CIA identified Pinel as the leader of an unnamed Contra group in Honduras, and knew the Contra boss was a reputed dope trafficker, describing him as a "partner" and "best friend" of Horacio Periera, Norwin's Costa Rican cocaine broker.) 

Cabezas was also taking $50,000 a month to the Contras' Miami offices, located in a shopping center near the Miami airport. Often he would give the money directly to FDN leader Aristides Sanchez, the brother of his suppliers Troilo and Fernando. Aristides Sanchez died in 1993; he was still working on behalf of the Contras at the time of his death, according to a laudatory obituary in the Miami Herald. 

Cabezas told the CIA that "he never specifically told Aristides Sanchez that the money came from drug proceeds but only that it was from Troilo. Cabezas said he assumed Aristides Sanchez must have known what Troilo was involved in." Other Contras certainly did. Former Contra official Leonardo Zeledon Rodriguez told UPI in 1986 that "Troilo sold 200 pounds of cocaine and received $6.1 million for it." 

The money Cabezas took to Central America was given to Pereira or an FDN logistics officer, Joaquin "Pelon" Vega, who lived in Danli, Honduras, Cabezas said. He assumed the money was used to buy food and clothing for the newly formed guerrilla army. (Vega could not be located by the author.) 

On one of his trips to Costa Rica with Contra cash in April or May of 1982, Cabezas told CIA investigators, he was called to a meeting at a San Jose hotel, where Pereira and Troilo Sanchez introduced him to a curly-haired, solidly built man he'd never seen before. The man called himself Ivan Gómez and told Cabezas that he was with the CIA— the agency's "man in Costa Rica." Gómez said he was there, Cabezas said, "to ensure that the profits from the cocaine went to the Contras and not into someone's pocket." Cabezas saw the CIA agent only once more, in late summer, when he was met at the San Jose airport by Pereira and the CIA man, but Gómez never spoke during the second meeting.

In an interview with a British television crew in late 1996, former CIA official Duane "Dewey" Clarridge said he'd never heard of Ivan Gómez. Clarridge was the CIA officer who headed the Contra project from 1981 to 1984 and was later indicted for lying to Congress about the Iran-Contra scandal. He was pardoned by President George Bush, a former CIA director. 

The 1998 CIA Inspector General's report strongly suggests Dewey Clarridge was lying once again, and it largely corroborates Cabezas' story. The CIA report confirms that an agent using the name "Ivan Gómez" was assigned to Costa Rica in 1982. As Cabezas claimed, he was the CIA's liaison to the Costa Rican Contra armies and, more importantly, was laundering drug money during the period in which Cabezas says he was delivering cocaine profits to the agent. 

Gómez, a former Venezuelan military officer, admitted during CIA-administered polygraph tests in 1987 that in March or April of 1982 he had been involved in laundering funds for drug dealers, but he claimed the dopers were relatives. (Since Cabezas did not disclose his contacts with agent Gómez until 1996, the polygraph examiner apparently did not ask the CIA agent about laundering cash for the Contras.) Despite Gómez's admissions, the CIA Inspector General dismissed Cabezas' story as an invention, suggesting that the trafficker could not have met Gómez because the agent hadn't yet arrived in Costa Rica when Cabezas recalls meeting him. But the CIA report fails to explain how a San Francisco cocaine dealer could so accurately dream up the alias of an undercover CIA agent stationed in Costa Rica, describe his role with the Contras with such precision, and pinpoint to within 30 days the time period during which the agent admits laundering drug money. Moreover, a former CIA asset who'd infiltrated the Frogman drug ring corroborated key elements of Cabezas' story in interviews with the Justice Department in 1997. 

Gómez was fired by the CIA in 1989 because of his repeated inability to pass polygraph tests concerning his drug dealing. The CIA toyed with the idea of reporting him to the Justice Department but decided against it and simply cut him loose. 

"It is a striking commentary on me and everyone that this guy's involvement in narcotics didn't weigh more heavily on me or the system," Gómez's former supervisor told CIA inspectors in 1997. His only interest in Gómez, he said, was to help "salvage" a good agent, which suggests that involvement in drug money laundering wasn't viewed by the CIA as the type of infraction that should necessarily ruin an agent's career. 

"Gómez" told the CIA inspectors he'd never met Cabezas or the other traffickers. 

Based on Cabezas's statements and the historical record from the early days of the Contra conflict, it appears that most of the cocaine profits Cabezas was delivering to Costa Rica in 1982 went to assist the Contras of the UDNFARN faction, which at that time was under CIA supervision. A 1984 DEA report described UDN-FARN's deputy commander, Edmundo Chamorro, as "well known to "The Company.'" So was his brother, UDN-FARN's commander, Fernando "El Negro' "Chamorro, whom the CIA describes as "playing a major role in the Contra movement. . .CIA contact with Chamorro began in 1982." 

For most of 1982, UDN-FARN served, however unwillingly, as the southern branch of the CIA's primary Contra force—the FDN—run by Meneses's friend Enrique Bermúdez and his Honduran-based former Guardia men. But in September of that year, when former Sandinista commander Pastora announced he was taking up arms against his old Sandinista colleagues, UDN-FARN jumped ship, leaving the FDN and officially uniting with Pastora's group to form a brand-new Contra army in Costa Rica, known as ARDE.

At that point, it is likely that the cocaine profits from Meneses's San Francisco operation began being used to benefit ARDE. Even then, however, the CIA retained oversight responsibility. When the Chamorros switched from the FDN to the ARDE, they simply changed their line of command. Instead of reporting to Bermúdez, as they had been doing, they now reported to Pastora. But both Pastora and Bermúdez were still reporting to the CIA. Like Bermúdez, Pastora was put on the CIA's payroll, where he remained until mid-1984. 

The merger between the Chamorro brothers and Pastora's group made sense politically because they had one trait in common, aside from their preference for fighting from Costa Rica: as former Sandinistas, they hated the ex-Guardia officers who made up the FDN. Pastora frequently outraged his CIA handlers by publicly complaining about his purported allies to the north, once picturesquely referring to them as "criminal mummies and gorillas." Bermúdez and the FDN considered Pastora a closet Communist and suspected him of being a Sandinista mole. 

Carlos Cabezas said his Contra money flights to Costa Rica continued throughout 1982 but were interrupted near the end of that year, when Horacio Pereira was arrested in Florida. Cabezas said one of the FBI's informants, Donald Peralta, a man who had accompanied him to Costa Rica on several occasions to deliver cash, tipped off the FBI that Pereira was heading south with a wad of greenbacks. 

FBI records show that on December 1, 1982, a confidential source told FBI agent David Alba that "Horacio Pereira and Augusto Monkel would be traveling from San Francisco via Miami to San Jose, Costa Rica, with between $80,000 and $100,000, which was the proceeds of cocaine sales in San Francisco." Alba called U.S. Customs, and the next day Pereira was arrested in Miami, boarding Air Florida Flight 473 to Costa Rica. The agents found $70,000 on him, which he had failed to declare. 

FBI wiretap records show that Cabezas was in contact with Pereira's cousin, Rosita, soon afterward. "Horacio going to court tomorrow," the FBI's notes of that phone call say. "Carlos has some money to help Horacio. The money taken by Customs will be kept. Carlos asked why Troilo has not called. Horacio was interviewed but did not mention Carlos' name. Carlos wants Horacio to call tomorrow." 

On Christmas Eve, after he was bailed out, Pereira called Cabezas and told him that he'd been set up and needed some money. Cabezas replied that "Jairo is giving him money," an apparent reference to Norwin Meneses's nephew, Jairo Meneses. 

Then something inexplicable happened. 

Pereira, whom the FBI knew to be a major international cocaine trafficker, was turned loose after paying a small fine for not declaring the $70,000. He returned to Costa Rica and immediately resumed drug trafficking, which the FBI learned while monitoring a phone call from Pereira to Cabezas on January 21, 1983. "Fine was completed. No probation, no prison," Pereira was recorded as telling Cabezas. "Horacio wants to get ready to send Carlos some material." 

By then the feds were crawling all over the drug ring. All of the traffickers' phone calls were being taped and transcribed; eventually the FBI would monitor more than 13,000 conversations. Cabezas and Zavala were being shadowed everywhere. Their dealers and their dealers' customers had their phones tapped as well. 

The wiretaps revealed that the Colombian side of Zavala's drug operation was using freighters registered to the Gran Colombiana shipping line to bring cocaine into the United States. Agents began following the Gran Colombiana ships as they plied the waters off the West Coast and watched as kilos of cocaine were unloaded by Cabezas's associates in San Francisco and Seattle. Right before Christmas, the FBI started taking the operation apart. 

On December 22, 1982, they intercepted two men coming off the freighter Ciudad de Nieva in Los Angeles, carrying thirty-nine pounds of cocaine. Another Gran Colombiana ship, the Ciudad de Cucuta, pulled into Pier 96 in San Francisco shortly after the first of the year, and the FBI set up a stakeout. It was a vessel that, according to one report, "had been raided in previous drug seizures." 

Nearly two weeks went by without anything happening. Then, just before 2 A.M. on January 17, 1983, during the heaviest fog of the winter, a silver-and-orange Chevy van and a Toyota Celica pulled up to a hole in a fence near a swampy marsh leading to Pier 96. Seven men got out and began wading through the swamp toward the docked freighter, disappearing into the darkness. Two hours later the Celica and the van returned, and the seven men materialized out of the gloom, carrying heavy duffel bags. Two of them wore divers' wet suits. 

The stakeout agents moved in, and one of the suspects unleashed a short burst from an Uzi submachine gun, but no one was injured, and they quickly surrendered. The agents found that all the men were heavily armed—a wise precaution, considering the value of what they were carrying: an astonishing 430 pounds of cocaine. Five other men were also rounded up that night, most of them Colombians who had been seen in Los Angeles and Seattle during earlier freighter stakeouts.

It was the biggest cocaine bust in the history of the West Coast. 

The next day the San Francisco Chronicle blasted the news of the drug raid across its front page. Headlined "Cocaine Seized from Frogmen at S.F. Pier," the story told of "a fog-shrouded scene right out of a B-movie" and featured a large front-page picture of a Customs agent in a windbreaker piling football-sized bricks of cocaine on a table. 

It was the first case made by President Ronald Reagan's new federal Drug Task Force in San Francisco, and U.S. Attorney Joseph Russoniello, a right-wing Republican close to the Reagan administration, made sure the media understood what a momentous seizure the president's new drug warriors had made. Russoniello told reporters that the street value of the cocaine the frogmen were carrying was, after "routine dilution," a whopping $750 million—three quarters of a billion dollars. Even the agents working the case couldn't swallow that one. Russoniello's quote in the Chronicle was followed by one from the DEA saying the load was worth no more than $100 million on the street, and between $11 million and $12 million wholesale. 

Two weeks later agents in Los Angeles raided the Gran Colombiana freighter Ciudad de Santa Maria and arrested fifteen people, again mostly Colombians, in the act of unloading 150 pounds of cocaine. A UPI story noted that "the arrests were made as the suspects tried to transfer the drug ashore by way of couriers and a scuba diver." That story said the cocaine was worth $22.8 million. 
(Amazingly, cocaine continued arriving in the United States aboard Gran Colombiana freighters all the way through 1986. The very same ship docked at Pier 96 that night in January 1983—the Ciudad de Cucuta—was found in Houston the following year with $18 million worth of cocaine secreted behind a steel wall. The shipping line was partly owned by the Colombian and Ecuadoran governments.) 

The hammer fell next on Carlos Cabezas and Julio Zavala. 

At 7 A.M. on February 15, federal agents and local police simultaneously raided fourteen locations in the San Francisco area, including Cabezas's house and Zavala's apartment, scooping up everyone and everything they could find. The haul included the Colombian supplier Alvaro Carvajal Minota; Cabezas; his mother, Gladys; Zavala; the low-level dealers they had been selling to; and some of their customers. In a bookcase in a San Francisco apartment, records show, police found "five flyers for Nicaraguan Benefit." 

Once again U.S. Attorney Russoniello hosted a media event, telling reporters: "Before, we got the mules. These are the higher-ups in the operation." But the real higher-ups eluded capture, as neither Norwin Meneses nor any of his family was charged. Former Meneses aide Renato Pena told the Justice Department in 1997 that Norwin had a DEA agent on his payroll at the time and the agent "called Norwin a few weeks before Julio Zavala and Carlos Cabezas were arrested and warned Meneses of their impending arrests." The DEA agent, who admitted knowing Meneses, disputed those allegations during a Justice Department interview. (Curiously, the agent recalled having the impression that Meneses was working with the CIA at the time "moving guns for the Contras.")

While Russoniello and the federal agents who accompanied him were more than happy to give out detailed tidbits concerning the Colombians—such as the fact that Carvajal Minota sent box loads of cash and jewelry each month to his mother in Cali—they had nothing at all to say about the cocaine and the cash the Nicaraguans were hauling to and from Costa Rica. 

The involvement of Pereira and the Sanchez brothers was never disclosed, nor were they ever charged with anything. For some reason, the fact that the former Nicaraguan ambassador to Guatemala was bringing cocaine into the United States wasn't deemed newsworthy —or indictable. 

The Meneses family's involvement with the drug ring was also suppressed. Defense lawyers had to get a court order to force the Justice Department to reveal that the 1981 searches targeting Jairo Meneses and Julio Bermúdez, had even occurred. After the lawyers got those files, they accused the FBI of "serious misrepresentation" for concealing the identities of individuals "who are, clearly from the government's point of view, either distributing cocaine obtained from some of the principals in this case, or supplying it to them." The records, they argued, revealed that there was "a direct and ongoing connection between the Meneses organization and Carlos Cabezas." 

The government replied that the searches had been of little importance. 

When news of the arrests reached Central America, reporters there saw an angle that their American counterparts missed. "Somocistas traffic in drugs," is how the pro-Sandinista daily, Barricada, headlined the story that appeared on February 20, 1983. "Narcotics police of San Francisco, California, carried out a haul last Wednesday of 20 cocaine traffickers, among whom are several Nicaraguans who supported through this criminal activity the economic needs of Contra groups." 

The paper quoted unnamed Nicaraguan diplomatic sources, asserting that "one could not establish how many of those captured are of Nicaraguan origin, but there were several, and they were tied to groups of former Somocista Guards in San Francisco, and that through the crime of trafficking in cocaine they are contributing economically to the Contras." It would take another three years before an American journalist would make the same connection. 

Julio Zavala complained to the court that similar stories had appeared in the Spanish-language press in Costa Rica, making it impossible for him to return to Central America. Both Zavala and Cabezas were held in prison on $1,000,000 bail, which Cabezas was unable to raise. After getting a look at the evidence the FBI had compiled against him, Cabezas's attorney advised him to cut a deal with the government and testify against Zavala, which Cabezas did. 

About a year later, shortly before his trial was to begin, Zavala's attorney, Judd Iverson, walked into U.S. District Court judge Robert Peckham's office and dropped a bombshell on his desk. Iverson handed Peckham two letters addressed to the court, written by Nicaraguan exiles in Costa Rica, regarding Julio Zavala's activities on behalf of the Contras. One was written by Horacio Pereira's brother-in-law, the exiled attorney Francisco Aviles Saenz, who identified himself as the international relations secretary for UDN-FARN. A published account said Aviles had also helped set up the Committee in Defense of Democracy in Nicaragua, a CIA front in San Jose, Costa Rica, with money from Venezuelan sources. The other letter was also written by Aviles, together with businessman Vicente Rappaccioli Marquis, on behalf of a group called the Conservative Party of Nicaraguans in Exile (PCNE). In the early 1980s he was part of UDN-FARN, according to a former UDN-FARN commander who'd been recruited by Rappaccioli. 

The Contras' letters said Julio Zavala, who stood accused by the Justice Department of being a cocaine kingpin, was actually a Contra official who had been working for the resistance forces at the time of his arrest; Zavala was the assistant treasurer of the PCNE and a longtime member of UDN-FARN, which "fights for the restoration of the democratic system in the Republic of Nicaragua. . .under the slogan 'God, Fatherland and Freedom.'" The reason they were writing Peckham, the Contra leaders stated, was because the FBI had something that belonged to them, and they wanted it back. 

When Zavala's apartment was searched the morning of his arrest, the police—in addition to finding an M-1 carbine, a practice grenade, a variety of passports, and a catalog of machine guns and silencers—found slightly more than $36,000 in Zavala's nightstand, which was confiscated as illegal drug proceeds. That was not an unreasonable assumption, given all the cocaine and drug paraphernalia the police found scattered about the place. But the Contras insisted that the money in the dealer's nightstand was theirs, and they had given it to Zavala so he could make some "purchases characteristic of this organization" while in San Francisco. "The retention of this money is prejudicing the progress of liberation, with natural consequences," Aviles warned Peckham.

According to the letter, Zavala had made several trips between California and Costa Rica on UDN-FARN's behalf, and during his last visit in January 1983 he was given $45,000 that UDN-FARN had "collected amongst our collaborators here in Costa Rica." To prove it, the Contra leaders provided copies of a letter appointing Zavala as the assistant treasurer of PCNE, and authorizing him "to collect within the United States money for the liberalization of Nicaragua from international communism"; a receipt showing the group had given him $45,000; his UDN-FARN credentials; and Aviles's sworn statement that he was willing to testify to Zavala's position if necessary. 

Defense attorney Iverson told Judge Peckham that he wanted to go down to Costa Rica and take the Contras' depositions. If what they were saying was true, he argued, Zavala was going to defend himself on the grounds that "agents of the U.S. government were intricately involved in the alleged conspiracy and either sanctioned the use of cocaine trafficking to raise funds for Contra revolutionary activity and/or entrapped the Defendant into participating under the belief that such activity was sanctioned." 

Peckham quickly scrawled his signature on an order sealing the Contras' letters and the other papers Iverson had submitted. Iverson had requested the secrecy order to keep the U.S. government from discovering the documents, which he felt might expose Aviles and Rappaccioli "and/or their families to harm or political pressure." In court a few weeks later, Iverson again raised the issue of the depositions, a request Peckham was still considering. Assistant U.S. Attorney Mark Zanides scoffed at the notion, saying that Iverson hadn't come close to showing a need to go "trudging off in the middle of the trial to Costa Rica without a firm basis for it." 

Judge Peckham disagreed. 

"It would be very important testimony to corroborate what they apparently claim is his defense. It has to do with the source of the money. My understanding is the Government will assert the money came from narcotics transactions?" 

"It is very likely," Zanides answered. 

"Well, he claims another source for another purpose," Peckham said. "And this evidence would corroborate that. It is very important evidence." 

"I don't know, I have not seen any reason why the government isn't entitled to know the identity of the witnesses," Zanides complained. "I don't know what the source of this information is, or alleged information. I'm flying blind." 

"There were letters from the people involved that were filed under seal with the court," Iverson reminded the prosecutor. 

"I don't know who they are," Zanides protested. "These letters could come from anybody. I don't know if Mr. Iverson has ever spoken with them personally. I don't know how he can vouch. . .it is just a letter." 

The prosecutor told Peckham that it wasn't "a situation where we are talking about a threat to the lives of the witnesses." 

"They think so," Peckham replied. 

"I think it is," Iverson said. 

After holding two hearings in the secrecy of his chambers, Peckham had the lawyers come to his courtroom on July 16, 1984, to hear his decision. Prosecutor Zanides again complained that he was being kept in the dark about the identity of the Contra officials. "You are talking about some unknown people in a foreign country with allegedly revolutionary affiliation," he argued. 

"The concern, I suppose, is that these people will be intimidated," the judge said, "not necessarily expressly. They are revolutionaries in Nicaragua. They want to overturn the Nicaraguan government, as I understand it. The Contras. They are based in Costa Rica and they have monies. Where those monies came from, nobody knows. There is speculation about that, but there is no evidence. They want to show that this money that was found in his possession came from the Contras." 

"I appreciate all that. That's been apparent," Zanides said. "Let's assume for a moment that I don't believe these people, that I think they're lying. I mean, I have to be able to make inquiry of those persons or agencies whom I believe possess that information." 

"Judge, these people probably have very close contacts with the CIA," Zavala's co-counsel, Marvin Cahn, argued. "We don't want the CIA saying to them, 'Don't testify.' I see no reason why an investigation can't be done after the deposition." 

"Oh, that's ridiculous," Zanides said. 

"I don't see anything ridiculous about it," Cahn retorted. 

"Would you look to the CIA?" Peckham asked the prosecutor. 

"I look anywhere I think there might be some information." 

"That is troublesome," the judge said. 

"Absolutely, I might look to the CIA." 

"Is that troublesome?" Peckham inquired of the lawyers. 

"Not to me," Zanides said. "I need to know. It may turn out that they may be telling the truth." 

"It is very troublesome to us to have the CIA involved because I think our witnesses won't be there if that happens," Cahn said. "It seems our witnesses should be afforded the same degree of protection that the government's informants are afforded." 

"That just doesn't add up," Zanides said. 

"There is a far more dangerous situation in Costa Rica than an informant has in the United States!" Cahn said. 

Peckham gently intervened. "They fear, you see, that there will be disclosures made," the judge explained to Zanides. "And again, I don't accept this because I have no evidence. So by my saying it, I don't want it understood that I am finding what I say to be fact. They are afraid. Just like you are afraid about the safety of informants, they are afraid that if the CIA is, in fact, financing these people that they will not want it disclosed and that they will take measures to make certain people don't get funding or be advised strongly not to cooperate. I don't know if you have control over that." 

"So the fear," Zanides asked, "is that the CIA is going to bring some pressure on these people not to testify, is that it?" 

"That's very much the fear," Cahn said. "And I think it is a realistic fear in this case." 

"I don't see any evidence. . .I can't even respond to that," Zanides argued. "What is the evidence the CIA—" 

"That is fairly well documented," Iverson interjected. "I don't think there is any question that they are down there and intimately involved with the group that is trying to overthrow the Sandinista government." 

"All we are saying," Judge Peckham told Zanides, "is that nobody should discourage them from testifying in this proceeding by way of deposition. I don't know what is so horrendous about that." 

Peckham granted the defense lawyer's motion to fly to Costa Rica during mid-August "for the purpose of taking depositions of Francisco Aviles Saenz and Vicente Rappaccioli Marquis." He instructed the government to pay $5,000 in travel expenses for the attorneys. 

Six days later the Costa Rican CIA station fired off a cable to Langley to warn that a federal prosecutor and an FBI agent were planning a trip to San Jose "to question two anti-Sandinistas in connection with the prosecution of a cocaine trafficking case." The problem, the station told Langley, is that both Aviles and Rappaccioli were Contra officials and belonged to an organization that had "unwittingly received CIA support." 

Both men were also CIA assets, the station said. Langley was advised to search its files for anything it had on them and their connection to the cocaine traffickers, and the cable ended by saying that the CIA station was "concerned that this kind of uncoordinated activity (i.e. the assistant U.S. attorney and FBI visit and depositions) could have serious implications for anti-Sandinista activities in Costa Rica and elsewhere." 

CIA headquarters discovered that Aviles was indeed a Contra official and had attended an August 1982 conference in Miami, where he was elected to the board of directors of the PCNE, which was receiving CIA money. 

Various branches of the CIA were alerted, and the agency sprang into action. The Justice Department and the federal prosecutor handling the Zavala case, CIA officials decided, needed to be "discreetly approached." 

On August 3, 1984, CIA headquarters instructed the Costa Rican station to keep away from Aviles and Rappaccioli, "to avoid giving Zavala's defense attorneys a possible issue." Langley reassured the nervous Costa Rican station that "there was no reason to believe that Zavala's attorneys knew Rappaccioli had any association with CIA." The whole thing could just blow over "if planned legal action is successful," the cable said.

CIA lawyer Lee S. Strickland flew into San Francisco from Washington, and on August 7, 1984, he sat down with prosecutor Mark Zanides and had what Zanides recalled as an "opaque conversation" with him. The CIA, Strickland told him, "would be immensely grateful if these depositions did not go forward." But Strickland "provided little or no explanation regarding what the CIA's interests were in the case," Zanides said. Strickland appeared "very concerned about the public identification of the individuals who were to be deposed." 

There was one problem, however. Neither the CIA nor the prosecutor knew what was in the letters the Contras sent to the judge. Before they could do anything, they needed to see those letters. 

That afternoon Zanides filed a motion asking Peckham to unseal the Contras' letters so government lawyers could read them. "Keeping it under seal at this point would result only in preventing the counsel for the United States from preparing properly for the deposition," he wrote. "At present the government is undertaking an inquiry with respect to the identities of these persons and counsel for the government is attempting to ascertain precisely what the facts are." 

At a hearing the next day, Zanides wanted to clarify the government's position. When he asked for the records to be unsealed, he told Peckham, he hadn't meant for the general public to be able to read them. All he was asking for was that the documents be shown to government lawyers under a protective order. 

Judge Peckham bristled at the prosecutor's suggestion. 

"I think it ought to be made public," he said. "Why should we not make it public? What is there left to keep—" 

"Your Honor," Zanides interrupted, "before I could comment on that—" 

But the judge abruptly cut off the prosecutor. 

"I am going to make it public. If it is unsealed it is going to be public," he warned. 

"Well, as Your Honor knows, I can't comment since I really haven't seen those materials," Zanides said. 

"I am ordering it made public. It is unsealed," the judge said. "I don't have to put it that way. I will just order it unsealed." 

"Very well," Zanides replied. "May I obtain a copy from your clerk this morning?" 

"Certainly," the judge said, taking out his pen. "So I will sign this. . .there is no restriction on the public disclosure of this." 

When Strickland and Zanides saw the letters the two CIA operatives had sent to Peckham, their faces must have fallen. They had put the Contras right in the middle of the biggest cocaine bust in California history. Zanides went running back to Judge Peckham with a request that he make the documents secret again, until the government could make a private "presentation to the court why the record re Costa Rica depositions should not be made public." Zavala's attorneys weren't invited.

Whatever the Justice Department told Peckham during the private meeting in his chambers, it worked. Peckham issued an order that afternoon sealing up the records he'd made public only that morning. Five days later Zanides filed a three-paragraph agreement that said simply that the "United States will not introduce the $36,020 in United States currency seized from the residence of Julio Zavala" and "agrees to return said currency to Julio Zavala." In exchange, the agreement stated, Zavala would not press the issue of the Costa Rican depositions. 

"As the matter stands now," a CIA cable stated, "CIA equities are fully protected." The cable bemoaned the fact that both Aviles and Rappaccioli "planned to testify at their deposition as to the source of the money in question. We can only guess at what other testimony may have been forthcoming." 

A U.S. embassy official in Costa Rica, after hearing that the depositions had been called off, quipped that they "had been canceled by The Funny Farm." His remark quickly got back to Langley, which instructed its Costa Rican agents to tell the diplomat "that CIA had no hand in cancellation of the trip." 

Years later, when questioned about the case by the author, former U.S. Attorney Russoniello said the only reason he agreed to return the drug dealer's cash was because it would have cost the government too much money to go to Costa Rica and take two depositions. There never was any evidence to suggest that the Contras were involved with the drug ring, he insisted. But even the Justice Department's Inspector General didn't buy that. After questioning Russioniello, the IG concluded that the CIA had intervened with the prosecutor because of "a desire to protect the public image of the Contras or the CIA. . .the CIA considered the potential press coverage of a Contra-drug link to be a sufficient reason to attempt to influence the decision to return the money to Zavala." CIA cables further described Russioniello as "most deferential to our interests." 

In addition, there was a stack of telephone records linking the Contras directly to the drug ring, which Russioniello never released or publicly admitted. "A defendant in the Frogman case had made 51 phone calls to the FDN office in San Francisco," a secret 1987 DEA report states, noting that one of its confidential informants had met with the traffickers at the FDN's office. 

The FBI agent who investigated the case, David Alba, had little doubt the CIA was behind Russioniello's decision to give back the drug money. "Zavala or someone he was working with was involved with the CIA," Alba told Justice Department inspectors in 1997. 

Even after the depositions were canceled, the agency continued to fret that its dirty secrets would somehow leak out. CIA officials were instructed to "monitor the prosecution closely so that any further disclosures or allegations by defendant or his confidants can be deflected." CIA lawyer Strickland argued in a memo that the Costa Rican station "must be made aware of the potential for disaster. While the allegations may be entirely false, there are sufficient factual details which would cause certain damage to our image and program in Central America." A memo from CIA general counsel Stanley Sporkin observed, "This matter raises obvious questions concerning the people we are supporting in Central America." 

In a lengthy cable to the Costa Rican station on August 24, 1984, Strickland detailed his concerns. "While this particular aspect was successfully resolved, the possibility of potential damage to CIA interests was not lost on the U.S. Attorney or headquarters. By virtue of Rappaccioli's relationship as a former covert action asset and a member of board of directors of a Contra organization, Aviles' role as director of the Contra support group office in San Jose, and their formal claim of drug-tainted money, case could be made that CIA funds are being diverted by CIA assets into the drug trade," he wrote. "Indeed, close relationship between Zavala, a convicted drug dealer, and Rappaccioli and Aviles could prove most damaging especially if any relationship, no matter how indirect, were to continue. As long as Rappaccioli and Aviles continue to play any role in the anti-Sandinista movement, any public disclosure of the foregoing would have as a certain element the fact that they were 'linked to' or 'assets of' CIA." 

Strickland told the Costa Rican station to look into whether the Contras were dealing drugs but warned "no action other than discreet inquiries should be undertaken without headquarters approval." 

What the CIA found was censored from the report, but the agency clearly didn't cut its ties with the two Nicaraguans. Aviles, in 1985, was appointed to the general staff of UDN-FARN. A 1988 State Department biography of Vicente Rappaccioli identified him as the secretary of the Contras' political division. Incredibly, the 1998 CIA Inspector General's report that contained all the cables claimed Aviles and Rappaccioli really hadn't worked for the CIA after all. The repeated references to them as CIA assets in the 1984 cables were mistakes, the IG claimed. 

In October 1984 the federal government returned $36,020 to Aviles and Zavala. And not a moment too soon: eight days after the check was issued, the U.S. Congress —outraged by the disclosure that the CIA and the Contras had dropped anti-ship mines in Nicaraguan harbors—cut off all CIA funding for the Contras.

Despite the CIA's efforts to keep Contra involvement in the so-called Frogman case from becoming public, some of the truth got out when Carlos Cabezas took the witness stand in late 1984 against his ex-brother-in-law. Under oath, and as a U.S. government witness, Cabezas admitted that some of the cocaine money was going to the Contras. He told the jury of his meetings with Horacio Pereira, and of Pereira's nervousness over the Contras' profits being misspent by the hard-drinking Zavala. Pages from the ledger books in which Cabezas kept track of the Contras' cocaine were introduced into evidence and made public, showing cocaine transactions with Contra official Fernando Sanchez. 

Zavala was convicted of trafficking and sentenced to prison. Cabezas's testimony went unchallenged. It also went unreported. Though the San Francisco news media had fairly swooned when Cabezas and Zavala were arrested, not a single reporter stuck around to cover the trial. The evidence of Contra involvement in cocaine trafficking in San Francisco would lie undisturbed in a federal court file for another two years.

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