CIA admits it overlooked Contras' links to drugs

November 3, 1998

Web posted at: 9:46 p.m. EDT (0146 GMT)

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WASHINGTON (CNN) -- The CIA overlooked or ignored reports that the Nicaragua Contra rebels financed their fight to oust the communist Sandinistas through the sale of drugs in the United States, according to an internal CIA report.

Fredrick Hitz, the now-retired CIA inspector-general who supervised the report, admitted that monitoring of the Contras was lax.

"We fell down on accountability.... There was a great deal of sloppiness and poor guidance in those days out of Washington," Hitz said.

The 450-page report, issued by the CIA last month, for the first time reveals information sent to the CIA by its field operatives about the activities of the Contra groups during the 1980s.

One cable sent to the CIA from a field office described a "trial run" of a drug route from Honduras to Miami in July 1981 to benefit the Nicaraguan Revolutionary Democratic Alliance (ADREN).

An earlier cable cited in the report said the rebel group felt it was being "forced to stoop to criminal activities in order to feed and clothe their cadre."

The report also cited the use of a Honduran businessman, Alan Hyde, for logistical support to the Contras, despite Hyde's identification in a 1984 U.S. Defense Department report as "a businessman making much money dealing in 'white gold,' i.e., cocaine."

The report details cases where the CIA dissuaded other federal agencies, notably the Drug Enforcement Administration (DEA), from probing the activities of Contra groups and their contractors. In one instance, the CIA discouraged the DEA from examining Oliver North's efforts to evade legal restrictions on Contra aid through a secret supply operation in El Salvador, according to the report.

The report is the second released by the agency in response to a series of articles that appeared in the San Jose Mercury News in the summer of 1996. Those articles accused the CIA of forming an alliance with drug dealers and Contra groups to introduce crack cocaine into south-central Los Angeles during the 1980s.

While the inspector-general's report contradicts the CIA's previous claims that it had little information on the Contras and drug-running activities, it offers no evidence supporting the newspaper's allegations.

Reporter Jonathan Aiken contributed to this report.