Apr 8, 1990

The real Iran-contra scandal stays hidden: As Poindexter trial ends, questions linger about US and drug kingpins | by Jerry Meldon | Published in The Boston Globe Sunday Focus, April 8, 1990


The close of the trial of Adm. John Poindexter, the former national security adviser, ends the short run of prosecutions of Iran-contra crimes. If the admiral’s head rolls, it rolls alone.

Neither his boss, Ronald Reagan, nor George Bush, we’re told, knew profits from arms sales to Iran went to the contras.

Robert MacFarlane, Poindexter’s predecessor, admitted lying about it to Congress but served no time behind bars. Lawyers for Oliver North and his field managers – Richard Secord, Albert Hakim and CIA agent Joe Fernandez – used the threat to expose state secrets to keep their clients likewise out of jail.

But while our attention spans have been worn down by the parade of finger-pointing defendants, the most insidious Iran-contra scandal remains covered up.

 Narcotics-tainted “allies”

 A year ago, Sen. John Kerry’s Senate subcommittee on narcotics, terrorism and international operations issued its long-awaited report. Among its more sensational findings was that the Reagan administration had hired several narcotics-tainted companies to supply the contras.

The owner of one of those companies was Juan Matta Ballesteros. In September, he was convicted in Los Angeles of moving cocaine in tonnage quantities. One enforcement official described him as the most significant drug kingpin ever tried in the Western states. He was sentenced to life in prison without parole.

The charges against Matta were filed in 1984, the same year as Matta’s air freight company, SETCO, according to Kerry’s report, became “the principal company used by the contras in Honduras to transport supplies and personnel.”

Ignoring the 1984 indictment – and a 1983 US Customs report that called Matta a Class I Drug Enforcement Administration violator and SETCO a firm “formed by American businessmen who are dealing with Matta and are smuggling narcotics into the United States” – the State Department, two years later, handed SETCO a $186,000 contract to resupply the contras.

Asked if his subcommittee had received an explanation, Kerry told this writer: “None whatsoever.”

But the contra connection does explain how Matta could live comfortably in Honduras until his arrest in April 1988. And there he might have remained, had the DEA not been after him for the murder of one of its own.

Matta and his Mexican partner, heroin and cocaine kingpin Miguel Angel Felix Gallardo, were prime suspects in the February 1985 murder in Guadalajara of DEA agent Enrique Camarena Salazar – which was dramatized in a recent NBC-TV mini-series. Camarena had been on the trails of Matta and Gallardo, both of whom in January were finally indicted in Los Angeles for his murder.

 The case of John Hull

 Gallardo walked free until a year ago, 12 months after Matta was seized. His bribes of Mexican officials had paid off. And Washington, for its part, couldn’t have been eager to see the Mexicans arrest him. According to Gallardo’s pilot, Werner Lotz, he, too, was a major contra supporter.

For the same reason, the Bush administration is unlikely to extradite John Hull. A rancher from Indiana, Hull was paid $10,000 a month by the CIA as its link to the contras in Costa Rica, where his land included several strategic airstrips. Five of Kerry’s witnesses testified that pilots who supplied the contras flew drugs, with Hull’s active participation, on the way back. Hull dismisses such charges as part of a communist plot.

But the stakes are now higher. Two weeks ago, a Costa Rica court charged Hull with murder for his alleged role in the May 1984 terrorist bombing of a press conference called by contra leader Eden Pastora in La Penca, Nicaragua. Four people, including an American journalist, were killed. Many others, including Pastora, were injured.

Pastora, a disenchanted former hero of the Sandinista revolution, was then under intense pressure to play ball with Hull, the CIA and the right-wing contra leadership. He refused.

In the aftermath, as noted in a forthcoming book by Jonathan Marshall and Peter Dale Scott, the Costa Rica-based contras began working closely with CIA-trained Cuban Americans. Though several had histories of narcotics arrests, their connections to the CIA had kept them out of jail.

Among those closest to Hull was Felipe Vidal, whom the Costa Ricans also charged with murder for the La Penca bombing. Another was the notorious Frank Castro. Castro had been arrested in a Miami drug bust in 1981, then released and arrested again in 1983 in Beaumont, Texas, for allegedly smuggling 200 tons of marijuana. The Texas charges were conveniently dropped in June 1984, when Castro began training contras in Florida.

Castro was closely associated with another Bay of Pigs veteran, Jose Antonio (Tony) Fernandez, who was recently sentenced to 50 years in prison for smuggling 750 tons of marijuana from Colombia. Castro was an unindicted co-conspirator in that case.

Castro’s links to Fernandez and the contras are eye-catching in light of an ongoing Houston Post investigation of the savings and loan scandal. In 1978, according to the Post’s Pete Brewton, Fernandez associates fronted for him in the purchase of a Florida bank with $1.1 million in drug money. The bank was kept afloat in 1984 by a $3 million loan from a Texas thrift. The same thrift went under in 1988, some $200 million in the red.

Brewton estimates the cost of government bailouts of the S & Ls with underworld and CIA connections at $13 billion, and asserts “the money may have been used to pay for covert CIA-sponsored activities, including aid to the Nicaraguan contras.”

Given the CIA’s history of collaborating with narcotics traffickers, it’s alarming that President Bush – a former CIA director – is now involving the agency in the war on drugs. Its record in Mexico alone should make this clear.

There, the CIA maintained a close working relationship with its sister agency, the Federal Judicial Police, despite that agency’s long record of protection of drug traffickers and the torture of alleged subversives. One former director of the Mexico agency was arrested in California for masterminding an international stolen-car ring – before exercising his CIA get-out-of-jail-free card. Another former agency director has just been indicted, along with his benefactors, Felix Gallardo and Matta Ballesteros, for the murder of DEA agent Camarena.

It was bad enough that Bush, exploiting his high-profile vendetta against Gen. Manuel Noriega, loosened the lid on CIA operations – allowing even the assassination of foreign leaders, which had been banned following a 1975 Senate investigation.

Washington had long tolerated Noriega’s drug trafficking and paid him generously with CIA funds. The irony is lost on the majority in Congress, which supports Bush’s policy.

Indeed, you begin to think Iran-contra never did happen.





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