Source: New York Times (NY) Pubdate: Fri, 17 Jul 1998 Contact: http://www.nytimes.com/ Author: James Risen C.I.A. WORKED WITH SUSPECTED DRUG TRAFFICKERS, REPORT ADMITS WASHINGTON -- The Central Intelligence Agency continued to work with about two dozen Nicaraguan rebels and their supporters during the 1980s despite allegations that they were trafficking in drugs, according to a classified study by the CIA. The new study has found that the CIA's decision to keep these paid agents, or to continue dealing with them in some less-formal relationship, was made by top officials at the agency's headquarters in Langley, Va., in the midst of the war waged by the CIA-backed Contras against Nicaragua's leftist Sandinista government. The new report by the CIA's inspector general criticizes agency officials' actions at the time for the inconsistent and sometimes sloppy manner in which they investigated -- or chose not to investigate -- the allegations, which were never substantiated by the CIA. The inspector general's report, which has not yet been publicly released, also concludes that there is no evidence that any CIA officials were involved in drug trafficking with Contra figures. "The fundamental finding of the report is that there is no information that the CIA or CIA employees ever conspired with any Contra organizations or individuals involved with the Contras for purposes of drug trafficking," one U.S. intelligence official said. The new report is the long-delayed second volume of the CIA's internal investigation into possible connections between the Contras and Central American drug traffickers. The investigation was originally prompted by a controversial 1996 series in The San Jose Mercury-News, which asserted that a "dark alliance" among the CIA, the Contras and drug traffickers had helped finance the Contra war with millions of dollars in profits from drug smuggling. The second volume of the report dismisses those specific charges, as did the first volume. The Mercury-News series alleged that this alliance created a drug trafficking network that was the first to introduce crack cocaine into South Central Los Angeles. The series prompted an enormous outcry, especially among blacks, many of whom said they saw it as confirmation of a government-backed conspiracy to keep blacks dependent and impoverished. The Mercury-News subsequently admitted that the series was flawed and reassigned the reporter. In the declassified version of the CIA's first volume, the agency said the Mercury-News charges were baseless and mentioned drug dealers who had nothing to do with the CIA. But John Deutch, the director of central intelligence at the time, had also asked the inspector general to conduct a broader inquiry to answer unresolved questions about the Contra program and drug trafficking that had not been raised in the Mercury-News series. Frederick Hitz, then the CIA's inspector general, decided to issue a second, much larger report to deal with those broader issues. Many of the allegations in the second volume parallel charges that first surfaced in a 1987 Senate investigation. The CIA is much more reluctant to publicly release the complete text of the approximately 500-page second volume than it was of the first, because it deals directly with Contras the CIA did work with. According to the report, CIA officials involved in the Contra program were so focused on the fight against the leftist Sandinista regime that they gave relatively low priority to collecting information about the possible drug involvement of individuals in the Contra army. The report concluded that CIA officers did report on drug trafficking by the Contras, but that there were no clear guidelines given to CIA officers in the field about how intensively they should investigate or act upon the allegations. In all, the CIA received allegations of drug involvement against about 50 figures in the Contra movement over the course of the war against the Sandinistas, according to the report. Those allegations were leveled against members of the Contra army as well as its air transport and support networks. Some of the allegations may have been specious, the result of Sandinista propaganda, while other charges may have been more substantive, U.S. intelligence officials said. It could not be determined from the CIA's records how many of those 50 cases were fully investigated by the agency. But of those, the CIA continued to work with about two dozen figures alleged to be involved in the drug trade, according to U.S. intelligence officials familiar with the report. They said the report found that the agency was unable to either prove or disprove the charges, or did not conduct adequate investigations into the allegations. U.S. intelligence officials, who provided information about the report, declined to identify the individual Contras who were the targets of the drug allegations. But they did say that while most of the charges were leveled against individuals, the report found that drug allegations had been made against one Contra organization, a group known as 15th of September. That group was formed in 1980 and was disbanded in January 1982, in the early stages of the Contra war. The CIA's decision to classify this second volume has already been met with criticism on Capitol Hill. Sen. John Kerry, D-Mass., who led a 1987 congressional inquiry into allegations of Contra drug connections, wrote a letter Thursday to CIA Director George Tenet asking that the report be immediately declassified. Kerry, who has reviewed the second volume of the inspector general's report, added that he believes CIA officials involved in the Contra program did not make a serious effort to fully investigate the allegations of drug involvement by the Contras. "Some of us in Congress at the time, in 1985, 1986, were calling for a serious investigation of the charges, and CIA officials did not join in that effort," Kerry said. "There was a significant amount of stonewalling. I'm afraid that what I read in the report documents the degree to which there was a lack of interest in making sure the laws were being upheld." CIA officials notified Congress at the time of most of the "significant" cases in which the agency decided to continue doing business with those Contras accused of dealing in drugs, the report states, but it does not detail the exact nature of the Congressional notification. One former CIA official familiar with the Contra program disputed the notion that agency officials did not take the drug charges seriously at the time. "You investigate all of them, and when they were credible, and when we could substantiate them, we would certainly take action," the former official said. "But wild or unproven allegations would not by themselves be enough to displace someone from the organization. Otherwise, we would have had no discipline or morale in these organizations." Allegations of drug involvement on the part of the Contras was hardly the only time that a group connected to the CIA has been accused of dealing in narcotics. The agency's local allies in Southeast Asia during the Vietnam War, and in Afghanistan after the Soviet invasion of 1979, also were accused of drug trafficking. - --- Checked-by: "Rich O'Grady"