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Authors: Nick Schou

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“The most aggressive attacks came from the news media,” Parry says. “It all started with the
Washington Times
claiming it had been disproved, but then the major news organizations piled on and acted like it was their job to put the story down.” The strange thing, Parry says, was that after Webb's story appeared, the major newspapers pretended that they had already covered the story, and that the CIA had already admitted the contras were involved in drug trafficking. “But that's not how they reported the story at the time, when they were busy mocking Senator Kerry as a ‘randy conspiracy buff,' ” Parry says.

So when Webb called Parry nearly a decade later with an interest in advancing the CIA-contra story, Parry tried to warn him. “I asked him how his relationship was with his editors,” Parry says. “He asked me what I meant. He seemed genuinely curious. I told him, ‘You will be facing a serious counter-attack, because this has happened to everyone who had written about it.' And Gary said he had a good relationship with his editors. He was naïve. He had no idea what he was about to set off on, how his colleagues would go after him.”

Martha Honey, now a research fellow with the Institute for Policy Studies, a liberal Washington, D.C., think tank, was also no stranger to the contra cocaine story. In May
1984, her husband, Tony Avirgan, a freelance cameraman, had been wounded at a press conference held in La Penca, Costa Rica by Eden Pastora, a former Sandinista guerrilla known as “Comandante Zero.” Pastora had defected from the rebels after the Nicaraguan revolution and formed his own contra army. At the conference, he announced he would no longer accept aid from the CIA. Halfway through Pastora's speech, an explosion ripped through the crowd.

Pastora survived, but Honey began to investigate the attack for the
New York Times
, convinced it was the work of Comandante Zero's rivals in a separate CIA-backed contra faction. In the course of her investigation, Honey stumbled into a covert contra support operation at the sprawling ranch of John Hull, an American expatriate who lived on the Costa Rican border with Nicaragua. Honey's sources told her that Hull and a group of Cuban-Americans were using his ranch as a transshipment base to help the CIA supply the contras with weapons.

“We knew about the arms shipments, but started hearing about drug shipments too,” Honey says. “It became clear that there was this whole network in Costa Rica on John Hull's farm. There were covert landing strips where this clandestine network was moving arms and men, but also drugs. Planes brought in supplies and left with drugs. It became clear that drugs were a central part of contra operations.”

In 1985, Honey hired Daniel Sheehan, a crusading attorney with the Christic Institute, a public interest law firm founded five years earlier by Sheehan, his wife Sara Nelson, and William J. Davis, a Jesuit priest. The firm had already won public acclaim—and even inspired a Hollywood film—for
successfully suing the Kerr-McGee Nuclear Power Company on behalf of whistleblower Karen Silkwood. In the La Penca case, Sheehan began compiling the information Honey and Avirgan had unearthed about Hull and his cohorts, whom the couple was certain had been behind the bombing. The most intriguing evidence came from Jack Terrell, an employee of Rob Owen, who reported directly to Oliver North at the White House's National Security Council. Terrell, who later testified in congressional hearings, told Sheehan he witnessed Hull admitting responsibility for the bombing during a meeting in Costa Rica with a rival of Pastora, a contra leader and CIA asset named Adolfo Calero.

In Sheehan's mind, however, that testimony was just one small part of a much larger puzzle. Sheehan saw the La Penca incident as a perfect vehicle to expose a covert team he believed was operating on the fringes of the CIA and the White House, a crew that went all the way back to the Bay of Pigs, the agency's failed 1961 invasion of Cuba, and the covert war in Laos. In May 1986, Sheehan filed suit against Hull, Oliver North, and several Reagan administration officials later named as Iran contra conspirators, charging them with negligence in the bombing injuries suffered by Avirgan.

Shortly after Sheehan filed the lawsuit, Honey and Avirgan received a notice from the Costa Rican postal service that they had a package awaiting them at the custom's office. The couple sent their housekeeper to pick it up. Later that night, several customs police barged into their house and arrested them for drug possession. The package had contained a hollowed-out book full of cocaine and a purported note from a Sandinista leader. “Dear Tony and
Martha,” it began. “Here is the latest sample of the shipment from Colombia we want you to test. If the quality is good enough, we will ship a ton to Miami, where it will be received by Senator Kerry.”

The charges were later dropped when the Costa Rican authorities investigated the drug shipment and determined it was a set up aimed at discrediting a pair of law-abiding journalists. But meanwhile, one of the witnesses in Honey's lawsuit was killed, and several others received death threats and had to flee the country. Things didn't go much better in the courtroom. Judge James L. King granted Sheehan discovery power allowing him to examine government records about the bombing and, more importantly, to force high-ranking Reagan officials to submit to depositions.

Sheehan furiously began collecting additional affidavits, but somewhere in all the excitement, it became unclear what the lawsuit had to do with the La Penca bombing. After two years of increasingly wild-sounding allegations, King threw the case out of court. Sheehan appealed King's ruling, lost, and was ordered to pay the legal fees for the defendants: $1,034,381.35. Avirgan, Honey, and several other journalists later reinvestigated the La Penca bombing and came to the conclusion that the CIA most likely had nothing to do with it. Instead, they blamed the bombing on a newly discovered Argentinean who appeared to have ties to the Sandinistas.

Despite the fact that Honey now admits she was wrong in her belief that Hull or his friends in the Reagan administration had been behind the bombing—a fact that would tend to invalidate the entire lawsuit—she insists that the real reason Sheehan lost the case was because he had become
obsessed with uncovering a widespread government conspiracy going back twenty years or more: A shadow government run by CIA officials and their private-sector allies that secretly pulled the strings of U.S. foreign policy. Critics of the lawsuit—and Sheehan—contend that Honey was naïve about her lawyer, or worse, complicit in his courtroom antics. But it's hard to find a fiercer critic of Sheehan than Honey herself. “Sheehan's a lousy, lousy lawyer,” she says. “After we found out about the Sandinista connection, we realized we had wasted millions of dollars and a decade with Sheehan,” she says.

In a 2000 interview, Sheehan defended the La Penca lawsuit. He told me that Honey and Avirgan were the ones who claimed that the CIA was responsible for the bombing, not him. “[Honey's] theory has never been proved one way or the other,” he said. “The attorney general of Nicaragua said that he investigated the entire case and was completely convinced that the bomber was the same guy we had identified as being in the meeting with John Hull. Martha changed her mind about the bombing more than a year after the case lost in court. So how does this come out to my doing anything wrong?”

W
ITHIN DAYS OF
Webb's conversation with Honey, Coral Baca called Webb. She said that Cornejo's lawyers had succeeded in their effort to obtain uncensored files about Blandon from his grand jury testimony. But rather than cooperate, the government had dropped Blandon from its list of witnesses. Just as Webb thought he'd never find
Blandon, he received a call from an attorney he knew in San Diego. The woman said Blandon was about to appear as a witness against her client, one of the Nicaraguans who had been busted with Blandon in San Diego a few years earlier.

The attorney added that Blandon was also being called to testify in the upcoming trial of one of the biggest crack dealers in the history of South Central Los Angeles, “Freeway” Ricky Ross. Webb knew the name from his investigation into California's drug forfeiture laws. Ross was an illiterate, but highly intelligent child of Texas sharecroppers, God-fearing farmers who lived in a boarded-up shack and raised Ross with the notion that the same fate awaited him.

Ross felt otherwise. After moving to Los Angeles, he became a tennis prodigy in high school but lost a college scholarship when his coach discovered he couldn't read. Faced with no lucrative employment prospects, Ross capitalized on his relationship with friends in the Crips street gang, the largest and most violent criminal organization in South Central Los Angeles, to establish himself as the area's most successful crack dealer. Ross was soft-spoken, but sophisticated and ruthless in his determination to rise above his sharecropper roots. As soon as he started dealing drugs, he began investing his profits in property along L.A.'s Harbor “Freeway,” hence the nickname, “Freeway Rick.”

By the time Ross' luck ran out in 1994, when he was arrested for distributing crack in Texas, Ross had become something of a local legend in Los Angeles. On December 20, the
LA Times
had published a 2,400-word profile of Ross that identified him the “king of crack” who was “key to the drug's spread” in that city. The story, written by
Times
staff
writer Jesse Katz, appeared just after Ross' release from prison. Ross accompanied Katz to the tiny hamlet in rural Texas where he'd been born, shed a few tears, and told the reporter he planned to put his criminal past behind him and lend his entrepreneurial talents to legitimate business activity in Los Angeles.

According to Webb's lawyer friend, Blandon had been Ross' supplier during the 1980s. When Ross had been released from prison in March 1995, Blandon had pleaded for his help in unloading a major coke deal. Ross agreed to pick up $ 1 million worth of cocaine at a department store parking lot in San Diego. What Ross didn't know was that Blandon was now a paid DEA informant, helping the government arrange a “reverse sting,” when a supplier sets up his underling.

Webb immediately called Alan Fenster, Ross' Beverly Hills-based attorney, and asked him what he knew about Blandon. At first, Fenster had no idea who Webb was talking about, but when Webb said he had heard that “Danilo” Blandon had been Ross' supplier, Fenster gasped with recognition. As is common in the paranoid culture of the illegal drug trade, Ross had only known Blandon by his first name.

A few hours later, Ross called Webb from inside the Metropolitan Detention Center in San Diego, where he was awaiting trial. In his book, Webb wrote that he pried Ross for information about his friend Danilo. “He was almost like a godfather to me,” Ross said. “He's the one who got me going.” Webb asked if it was true that Blandon was Ross'main cocaine source. “He was,” Ross affirmed. “Everybody I knew, I knew through him. So really, he could be considered as my only source. In a sense, he was.”

Webb flew down to San Diego to meet with Fenster and Ross, neither of whom had any idea that Blandon had testified about his involvement in raising money for the contras. “What would you say if I were to tell you that he was working for the contras, selling cocaine to help them buy weapons and supplies?” Webb asked. Ross giggled nervously. “I would say that was some fucked up shit there,” he offered. “They say I sold dope all over, but man, I know he done sold ten times more than me.”

In December 1995, Webb gathered his notes and documents and wrote a four-page memo to his editors, outlining his discoveries, an event he described three years later in his book,
Dark Alliance
. “This series will show that the dumping of cocaine on L.A.'s street gangs was the back end of a covert effort to arm and equip the CIA's raging army of anti-communist contra guerrillas,” Webb wrote. “While there has long been solid—if largely ignored—evidence of a CIA-contra-cocaine connection, no one has ever asked the question: ‘Where did all the cocaine go once it got here?' Now we know the answer.”

Webb wanted the series to run in March 1996, when Ross was scheduled to face a federal jury on his latest charge of dealing crack—a so-called “third strike” offense that could send him to prison for the rest of his life. He asked for permission to fly down to Miami to interview some of Blandon's associates, and to travel to Nicaragua to interview Norwin Meneses, who was locked up inside a Managua jail.

“I believe it was at the request of managing editor David Yarnold, who was my boss, that Gary came into the newsroom
and met with the two of us,” says Dawn Garcia. “Yarnold read the memo, really liked the sound of the project, and said he wanted to be directly involved—that we should work through him. The project editor was not invited to the meeting.” The uninvited project editor was Jonathan Krim, assistant editor for investigative projects, whose job was specifically to edit complex investigative series. According to several sources at the
Mercury News
, Yarnold and Krim didn't like each other—Krim felt Yarnold was unqualified, and Yarnold thought Krim was arrogant. Their mutual animosity would have disastrous consequences for “Dark Alliance.”

As Webb later wrote in his book, Garcia and Yarnold were amazed with his discoveries. “Yarnold read the project memo, shook his head and grinned,” Webb wrote. “This is one hell of a story,' he said. “How soon do you think you can complete it?' ” Webb asked for some time to travel to Central America to do further reporting, and said he would start writing as soon as he got back. Yarnold approved the trip.

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