Cocaine

Cocaine is a stimulant extracted from the leaf of the coca bush, which grows almost exclusively in South America. The records on cocaine in this archive are the 1988 report of the Senate subcommittee chaired by John Kerry, the two volumes of the Central Intelligence Agency Inspector General's investigation 96-0143-IG (1998), the Justice Department Inspector General's review of December 1997, and the federal court records on the Medellin Cartel and the Cali Drug Cartel.

Production and routes

The CIA Inspector General's report stated that about 85 percent of the world's coca supply was grown in Peru and Bolivia and the rest in Colombian rain forests; that since the late 1960s Colombia had dominated the processing and trafficking of cocaine made from Peruvian and Bolivian leaf, producing little coca itself until the late 1980s; and that extraction takes three steps, from leaf to paste, paste to base and base to powder. It stated that throughout the 1980s South American traffickers used Central America as a secondary route and as a place to refuel, and that by the early 1980s almost every country of the isthmus served as a transshipment, staging or refueling point, with cocaine reaching Louisiana, Texas, Colorado, Georgia, West Virginia and New York. It stated that no authoritative estimates of the 1980s quantities existed.¹

The Kerry subcommittee wrote that exports began in the late 1960s when a small Cuban-American group in Miami used couriers carrying a few kilograms, that Colombians led by Pablo Escobar, Jorge Ochoa and Carlos Lehder seized the distribution networks in the 1970s, and that the Medellín organizations combined in 1982. It reported the estimated earnings of the Cartel at $8 billion a year and recorded testimony from the money launderer Ramon Milian Rodriguez on shipping currency to Panama.² The Second Circuit described the Cali cartel in 1993 as allegedly importing about 3,000 kilograms a month into the United States.³

Prices

Gary Webb, citing Guy Gugliotta and Jeff Leen, wrote that wholesale kilogram prices in the United States fell from about $75,000 in 1979 to about $60,000 in 1982 while gram prices fell from $321 to $259.⁴ Ronald Lister told the CIA Inspector General that the kilogram price he observed went from about $60,000 in 1982 to a low of about $20,000 in 1986.⁵ The Justice Department Inspector General cited DEA estimates of 44 tons of cocaine entering the United States in 1980 and 40 to 48 tons in 1981, and attributed the rise of crack to a Colombian cocaine glut that lowered prices, together with crack's cheap production and distribution.⁶

Contra-connected trafficking

Webb wrote that the earliest documented Contra cocaine pipeline began in December 1981, when associates of Norwin Meneses proposed selling cocaine to raise money for the Contras, and that Carlos Cabezas testified a meeting in Costa Rica was "the genesis of an effort to raise money for the Contras by selling drugs." In the CIA Inspector General's summary of his statements, Cabezas placed that meeting in December 1981 at a hotel in San José with Troilo Sanchez, Horacio Pereira, Julio Zavala and Zavala's wife, said that after a first delivery in early 1982 "Contra mules," typically airline flight attendants, brought cocaine to San Francisco one kilogram at a time in woven baskets, and said that at a hotel meeting in April or May 1982 a man introduced as "Ivan Gomez" of the CIA told him he was there to ensure that the profits went to the Contras. The Inspector General stated that the physical description of "Ivan Gomez," the alias of a CIA independent contractor, did not match the man Cabezas described as "Roberto," and that Cabezas saw no money or drugs given to Gomez.⁷

On January 17, 1983, federal officials in San Francisco made 12 arrests and seized 430 pounds of cocaine brought ashore by swimmers from a Colombian freighter, and more than 50 people were eventually arrested in what the Inspector General called "The Frogman Case." Webb wrote that FBI agents intercepted seven frogmen carrying 430 pounds at Pier 96, the largest West Coast cocaine seizure to that time, and that two weeks later 150 pounds were seized from a sister ship in Los Angeles. Two of those arrested, Julio Zavala and Cabezas, later claimed their trafficking was linked to the Contras; none claimed a CIA relationship at the time. In 1984 federal prosecutors returned $36,800 seized from Zavala's residence in February 1983 after the court received letters from two persons who claimed to represent Contra organizations. The Inspector General found no information that the CIA had any relationship with the Frogman defendants, though a relative of one had a relationship with the agency until mid-1982.⁸

Danilo Blandón, according to Webb, testified that he sold 200 to 300 kilograms for Meneses in Los Angeles and that "all the profits were sent to the Contras." In his statement to the CIA Inspector General, Blandón said Meneses gave him two kilograms on credit at $60,000 each in 1981, that he and Meneses stopped working together in 1983 after a dispute, and that he did not begin supplying Ricky Ross until about 1985; the Justice Department Inspector General reported that Blandón was indicted in San Diego in 1992, sentenced to 48 months, later reduced to 28 months for his cooperation, and then worked as a DEA informant.⁹

Suppliers and quantities

Webb wrote that a 1990 DEA report showed the ring sourced cocaine from the Suarez family in Bolivia and the Ochoa family in Colombia, and that when shown an FBI report that the Torres brothers estimated Blandón moved over 5,000 kilograms between 1980 and 1991, Meneses laughed and said, "It would be more accurate if you multiplied that by ten." Webb wrote that the DEA estimated Blandón imported between 18,000 and 27,000 kilos from 1982 to 1990, and that a 1996 Los Angeles County Sheriff's report quoted sources saying Blandón sold 10,000 kilos "mostly in South Central Los Angeles" in a single two-year span.¹⁰ The December 1996 summary of the Sheriff's inquiry stated that its information did not support the assertion that the FDN obtained money and arms through cocaine sales.¹¹ The Justice Department Inspector General recorded a Blandón estimate of 2,000 to 4,000 kilograms sold to black dealers and Ross's trial estimate of roughly 2,000 to 3,000 kilograms over seven years.⁶

The Justice Department Inspector General found that Meneses ran large trafficking operations in Central America and the United States from the 1970s, was indicted in San Francisco in February 1989 under seal, and was arrested in Nicaragua on November 3, 1991 with Enrique Miranda and three others in an attempt to ship 764 kilograms of cocaine; he received 25 years and was released on November 14, 1997. The San Francisco indictment remained pending.¹²

Conversion to crack

The CIA Inspector General stated that crack, a smokable form developed in the mid-1970s, is made by dissolving cocaine in water, adding a material such as baking soda and heating until "rocks" form, that it can be made near the point of sale, and that because it is sold in small units the dealer pays the same price for the cocaine and makes up to four times the profit.¹ Webb quoted a 1991 DEA report recording Blandón's statement that "one of the groups that he supplied cocaine to were black gang members in Los Angeles that didn't care about the quality of cocaine because they were going to convert it to crack anyway," and wrote that crack was sold in $20 hits and that Ross at his peak moved over 200 kilos a month and produced about 165,000 vials of crack a day.¹³ Ross told the CIA Inspector General that he began dealing in 1979 or 1980, learned to cook crack from an acquaintance in 1981, bought about 100 kilograms a week from Blandón by 1984, and at the 1985 peak was reselling up to 700 kilograms a month; Blandón said he supplied Ross two to three kilograms a day in 1985 and 1986 and denied the 100-kilogram weekly figure.¹⁴ The Justice Department Inspector General concluded that Ross and Blandón "certainly contributed to the crack epidemic in South Central Los Angeles" but were not "singularly or primarily responsible for it," and called the suggestion that they spread crack across the country "pure hyperbole."⁶

What the intelligence record says about the trade

The Kerry subcommittee concluded that drug traffickers used the Contra war as cover in Honduras and Costa Rica, that individuals who supported the Contras were involved in trafficking, that State Department humanitarian-aid funds were paid to companies of traffickers some of whom had been indicted, and that U.S. intelligence reporting on narcotics was "marginal and woefully inadequate," finding no single case made on a tip from a U.S. intelligence official. It did not find that the Contra leadership participated directly in smuggling, although the FDN moved funds through a trafficking enterprise and money laundering operation.¹⁵ The CIA Inspector General's second volume stated that analysts of the Directorate of Intelligence in the 1980s concentrated on the Medellín Cartel, that Central America was "just a blip on the scope," and that policymakers wanted to "get" the Sandinistas on narcotics rather than the Contras.¹⁶ The Kerry report recorded DEA testimony that in June 1985 Lieutenant Colonel Oliver North suggested to the DEA that $1.5 million in drug money aboard an aircraft piloted by the informant Barry Seal be given to the Contras, which the DEA rejected.¹⁷