It didn’t take DEA agent Celerino Castillo III very long to discover that something very strange was going on at Ilopango Air Force Base in El Salvador. Two days into his new job at the DEA’s regional office in Guatemala City in October 1985, Castillo said the agent-in-charge, Robert Stia, took him aside and told him that the U.S. government was running a covert operation at the air base. Castillo should be careful not to interfere with it.
It struck the former Texas policeman as odd advice. Why would a DEA field agent need to be warned about interfering with a legitimate government operation? Castillo was there to fight drug dealers. Whatever they were doing at the military airfield outside San Salvador couldn’t possibly concern him. At any rate, it wasn’t as if he was going to be spending a lot of time in El Salvador. Though he was the country ’s only DEA agent, Castillo lived and worked in neighboring Guatemala and had duties there also.
Besides, El Salvador in late 1985 had all the makings of a very sorry posting. The war-torn country produced no drugs, and as far as anyone knew there were no major drug rings operating there. It was of such little concern to the American government that the DEA never opened an office in the country. If El Salvador was anything, it was a resting place for cocaine mules on their way north.
Flipping through the reports of his predecessors, Castillo could see that the DEA’s role in the country had been limited to intelligence gathering, collecting information about drug shipments passing through and filing them away, making few seizures. “We were playing traffic cop, taking down the license numbers of speeders but never writing any tickets,” Castillo would later observe.
Castillo put his boss’s warning about Ilopango down to bureaucratic caution and got on with his job, which was to train and recruit Guatemalan and Salvadoran policemen to become soldiers in America’s worldwide war on drugs. Since the DEA couldn’t legally make any arrests in Central America, his assignment was to put together local antinarcotics squads the DEA could trust enough to work with, and develop informants who could provide real-time intelligence.
But no matter where he went, it seemed, Ilopango kept coming up.
Castillo was out one day with a DEA informant in Guatemala, a Cuban named Socrates Sofi-Perez, who proudly informed Castillo that he was a Bay of Pigs veteran and a Contra supporter. After learning that his new control agent had been decorated for fighting Communists in Vietnam, Sofi-Perez confided that he was helping the Contras fight Marxism in Nicaragua and laid out a scheme that was remarkably similar to the operation Frigorificos was then conducting in Costa Rica: a shrimp company he owned was being used as a front to launder money for the Contras. The Contras were also dealing in cocaine, he told Castillo, using a small air force based at Ilopango that was ferrying war materials for the cause. He justified the trafficking by blaming the U.S. Congress for illadvisedly cutting off Contra aid.
Castillo wasn’t sure if his informant was trying to impress him, pull his leg, or waste his time. The idea of a U.S. government-sponsored operation dabbling in drugs struck the six-year DEA veteran as absurd. But there was one way to find out. The next time he was in El Salvador, Castillo said, he bounced the Cuban’s story off one of the few informants the DEA had there, Ramiro Guerra, who owned a coffee shop in San Salvador. Guerra was working for the DEA as the result of a pending cocaine trafficking indictment in San Francisco, where he had lived for many years. While hiding out in El Salvador, Guerra picked up pocket money by acting as an informant for the very agency that wanted him in jail back in the United States. He had also insinuated himself into Roberto D’Aubuisson’s right-wing ARENA party, and had risen to a high level inside the party structure.
To Castillo’s surprise, Guerra told him that the information about drugs at Ilopango was probably true. He’d heard the same rumors himself. And he confirmed that there was indeed a small air force based there that was illegally flying supplies to the Contras, but it really wasn’t very secretive. While headquartered on the restricted military side of the Ilopango airport, the Contra air supply operation was being run quite openly, and a lot of his friends in the Salvadoran Air Force knew about it, Guerra told Castillo.
“The woman selling tortillas at the gate of Ilopango could tell you what was going on,” the assistant regional security officer for the U.S. embassy in San Salvador told Iran-Contra investigators in 1991. “Anyone who ever flew into or over Ilopango air base could see something like that was going on. When looking down at Ilopango from the air, one could see one side of the airfield having a ragtag operation of inferior planes, dilapidated buildings and the like. On the other side of the airport were nice facilities, lift trucks unloading supplies from more sophisticated and bigger aircraft, and gringos running around.”
The modern facilities “all belonged to the American operation,” the officer said, adding that he didn’t know “if it was a CIA operation or what, but he knew there was Contra resupply activity at Ilopango.”
While CIA officials denied they were running the show, they admitted they were keeping a very close eye on it. “We had a capability and indeed a responsibility for reporting what had been happening at Ilopango,” said Alan Fiers Jr., the former CIA official who headed the Contra program from 1984 to 1988.
Guerra told Castillo that a Cuban named Max Gόmez was doing the actual day-to-day management of the operation for the U.S. government. “Gόmez” was the name then being used by CIA agent Felix Rodriguez, a Bay of Pigs veteran who’d had a remarkable career with the agency as a paramilitary specialist. Among other operations, he’d been in on the capture and execution of Che Guevara. In early 1985 Rodriguez appeared in El Salvador as an adviser to the Salvadoran Air Force, working on a helicopter-based counterinsurgency operation against the FMLN guerrillas.
While Rodriguez has always claimed—sometimes under oath—that he was retired from the CIA and in El Salvador merely as a volunteer and private citizen, former CIA officer Fiers suggested otherwise. He testified that Rodriguez was sent there in early 1985 as part of a CIA reorganization that began after Fiers took over the Central American Task Force. “As a result of the change in management of the task force...we undertook a complete review of our efforts in San Salvador...and made adjustments in that undertaking that left certain operations, certain activities that we had—left a void,” Fiers testified in 1992. “Felix Rodriguez was put into—sent to El Salvador to work in the areas where we had left a void and was going to take over those responsibilities, or at least in part take over those responsibilities.”
Rodriguez’s journey from “retirement” to Ilopango began with a very strange step. Shortly before he left for Washington, D.C., to get final approval for his mission to El Salvador, he received a call from a friendly private eye in Miami who wanted him to meet “a client who could compromise the Nicaraguan Sandinista government for drug-money laundering,” Rodriguez wrote in his memoirs.
The client turned out to be former Medellín cartel accountant Ramon Milian Rodriguez—the man who had set up the Costa Rican shrimp company Oliver North would later use to funnel money to the Contras. Rodriguez said Milian was trying to broker information to obtain help in the money laundering case pending against him. Not only did he tell Rodriguez of Manuel Noriega’s drug activities, but he claimed he could provide proof of Sandinista drug dealing. Rodriguez said he passed the info along to the CIA and FBI and heard nothing back.
Milian tells a very different story. He met with Rodriguez to offer $10 million to the Contras in exchange for the U.S. government dropping the money laundering charges against him, he says; Rodriguez accepted the offer, and money was delivered to him on five separate occasions. Milian later failed a lie detector test when asked about making payments to Rodriguez, but the examiner reached no conclusions about his claim that he’d given money to the Contras. In congressional testimony, Noriega’s former political adviser described Felix Rodriguez as “a very close friend of Milian.” Both were Cubans who had been active in Miami’s anti-Castro movement.
Most accounts date the Contras’ use of Ilopango to September 1985, when North wrote to Rodriguez, asking him to use his influence with Salvadoran Air Force commander Juan Rafael Bustillo to secure hangar space for Contra supply flights. Rodriguez claimed he “greased the skids” with Bustillo and eventually became the overseer of North’s Contra resupply operation at the air base.
In actuality, the Contras had been using Ilopango with General Bustillo’s blessings since 1983, when Norwin Meneses’s friend, CIA pilot Marcos Aguado, made arrangements to base Edén Pastora’s ARDE air force there.
Since he could not devote all of his time to North’s secret air force, Rodriguez wrote, “I found someone to manage the Salvadoran-based resupply operation on a day-to-day basis. [At Ilopango] they knew that person as Ramon Medina. I knew him by his real name: Luis Posada Carriles.”
With men like Luis Posada and Marcos Aguado running things at Ilopango, it’s little wonder DEA agent Castillo was hearing rumors about Contra drug trafficking. Luis Posada was a veteran CIA agent with a history of involvement with drug traffickers, mobsters, and terrorists. He was recruited by the CIA in the 1960s after years of working with anti-Castro Cubans in Miami and was implicated in a number of terrorist incidents conducted by various Cuban extremist groups. In 1967, CIA records show, Posada was investigated by the Justice Department for supplying explosives, silencers, and hand grenades to Miami mobsters “Lefty” Rosenthal and Norman “Roughhouse” Rothman. Rothman was a close associate of South Florida’s Mafia chieftain, Santos Trafficante. A memo in Posada’s CIA file said, “Posada may have been moonlighting for Rosenthal,” but in late 1968 he was transferred by the agency for “unreported association with gangster elements, thefts from CIA, plus other items.”
Posada was sent to Venezuela and began working as an official of the Venezuelan intelligence service. In 1973 the DEA received a report that Posada “was in contact with two Cubans in Miami who were reportedly smuggling narcotics into the United States for Luis Posada.” According to the informant, Posada was to be “the main contact” in a major cocaine smuggling operation involving members of the Venezuelan government. The DEA placed Posada under surveillance and he “was observed by agents in Miami to meet with numerous identified upper echelon traffickers in Miami during March 1973.”
Records show the CIA was fully aware of its agent’s reported involvement with drug traffickers. It received word in February 1973 that “Posada may be involved in smuggling cocaine from Colombia through Venezuela to Miami, also counterfeit U.S. money in Venezuela.” But the agency decided “not to directly confront Posada with allegation so as not to compromise ongoing investigation.”
According to the notes of a congressional investigator who reviewed Posada’s voluminous CIA files in the late 1970s, cables in the file “indicate concern that Posada [was a] serious potential liability. Anxious to terminate association promptly if allegations prove true. By April 1973, it seems sure that Posada involved in narcotics, drug trafficking—seen with known big time drug trafficker.” But after questioning the Cuban about his contacts, the agency found him “guilty only of having the wrong kind of friends” and continued his employment.
His choice of friends continued to plague Posada, however. In January 1974 he asked the CIA to provide a Venezuelan passport for a Dominican military official, which the agency refused to do on the grounds that it “cannot permit controlled agents to become directly involved with illicit drug trafficking.” A few months later the DEA received a report that Posada was trading weapons for cocaine with a man the DEA believed “is involved in political assassinations.”
According to records at the National Archives, the CIA formally terminated Posada in February 1976. Eight months later he was arrested in Venezuela and accused of participating in the midair bombing of a Cuban DC-8 airliner, which killed seventy-eight people. Though never convicted of the crime, he spent nearly ten years in Venezuelan prisons before escaping in the summer of 1985 and going underground. He resurfaced at Ilopango in early 1986 as Felix Rodriguez’s right-hand man, telling investigators that “Rodriguez and other Cuban friends” helped him “get out of Venezuela and relocate in El Salvador. Upon arriving in El Salvador, Posada stayed with Rodriguez for two or three days. Rodriguez then helped Posada get a house in San Salvador, where Posada lived for the next year or so.”
Though allegations of Contra drug trafficking were swirling around Ilopango, DEA agent Castillo was having difficulty getting firsthand evidence of it. For one thing, the air base was in a very protected position, high atop a plateau, surrounded by imposing cliffs. The area where the trafficking was supposedly going on was off limits to the public, tightly guarded by the Salvadoran military. If he was ever going to find out the truth, Castillo figured, he needed to get onto that side of the base.
He went to Salvadoran Air Force commander Bustillo, lord and master of Ilopango, for permission, but got the cold shoulder. “An agent from the DEA’s branch office in Guatemala City came to San Salvador seeking access to Ilopango,” the New Republic reported in 1990, adding that Bustillo “stalled” the requests. “There was never a good reason why [the DEA] couldn’t get on Ilopango,” the magazine quoted an unnamed U.S. official as saying. “They just kept putting off meetings, stuff like that.”
So Castillo improvised. He recruited a Salvadoran named Murga, who wrote the flight plans for the private planes on the civilian portion of the base. Murga had excellent contacts on the military side and could come and go at will. He became Castillo’s eyes and ears inside Ilopango.
Murga knew all about the Contras’ drug running, Castillo said, because he was filling out their flight plans and inspecting their aircraft; the pilots were so brazen that they told him they were flying dope to the United States and money to Panama. Sometimes they left with the kilos in plain view, or arrived with boxloads of money, Castillo said.
In a once-secret 1992 interview with the FBI, ex-CIA agent Posada recounted that “the resupply project was always looking for people to carry cash from the United States into El Salvador for Posada to dispense. They were always worried about the restriction on only taking $10,000 out of the United States at one time. Any time any of the resupply people went up to the United States for any reason, whether it was a personal visit or whatever, they would be asked to bring money back.” Posada was told “the money came from Washington,” but never got a better explanation than that.
The drugs often arrived in private planes flown by Contra pilots from Costa Rica, Murga told Castillo; on other occasions they came in military aircraft from Panama.
When Castillo typed the names of the Contra pilots Murga had given him into the DEA’s computers, nearly all of them came back as documented narcotics traffickers. Among the busiest of the pilots was Francisco Guirola Beeche, the scion of one of El Salvador’s most influential families. How Chico Guirola wound up at Ilopango flying for the Contras is an illuminating tale; he should have been sitting in a federal prison cell in the United States.
On the morning of February 6, 1985, a white T-39 Sabreliner jet took off from John Wayne Airport in Orange County, California, with Guirola and three other men—Cuban-Americans—aboard. It stopped briefly at the Kleberg County Airport in Kingsville, Texas, to refuel, and was met by a posse of U.S. Customs Service agents wielding search warrants. The agents had been tracking the men since the month before, when they were spotted in the same plane leaving Orange County for Florida. In mid-flight, they had suspiciously diverted to Panama, where they landed with $1.2 million in cash.
Guirola and his crew were all listed in Customs databases as suspected drug traffickers, and their airplane was on a watch list as a suspected smuggling craft—for good reason, it turned out. In the Sabreliner’s cargo hold were fourteen suitcases, which Guirola claimed as his. He pulled out a Costa Rican diplomatic passport and advised the agents not to search the suitcases, or it would “cause trouble.”
He was right. They were bulging with cash, a total of $5.9 million in small bills, the largest cash seizure in Texas history. When the agents announced they were arresting the men for trying to smuggle the cash out of the country, Guirola claimed diplomatic immunity because his mother was the Costa Rican vice-consul in New Mexico.
In court records, federal agents charged that the cash was drug money destined for El Salvador. They cited DEA records that said Guirola had been “reportedly involved in cocaine and arms smuggling in El Salvador and Guatemala” and noted that he was a top aide to Salvadoran death squad leader Roberto D’Aubuisson.
The latter claim was confirmed by the Los Angeles Times, which reported that Guirola had accompanied D’Aubuisson to a “very sensitive” meeting with former CIA deputy director Vernon Walters in May 1984. According to the story, Walters had been dispatched in a frantic attempt to talk D’Aubuisson out of assassinating Thomas Pickering, the U.S. ambassador to El Salvador.
Guirola, who attended college in California with one of Anastasio Somoza’s nephews, had allowed D’Aubuisson to use his house as a campaign headquarters when he ran for Salvadoran president in 1984. Guirola’s passport, which was signed by D’Aubuisson, identified him as a “special adviser” to the Salvadoran Assembly. He was also carrying credentials from the Salvadoran attorney general’s office.
Since Guirola was using an Orange County airport as his departure point, it is possible that the millions he was hauling out of the country came from Los Angeles-area drug sales. But the source of the funds was never made public. “The investigation came to a sudden, abrupt halt with a lot of questions unanswered,” U.S. Customs agent Ernest Allison complained.
That was because the Justice Department had made a quick deal with Guirola: If he let the U.S. government keep the money, he’d be let off with probation. Guirola and one of his companions pleaded guilty to a minor currency violation charge and walked. Charges against another passenger and the pilot were dropped, and the plane was given back.
“I have a hard time swallowing it,” federal judge Hayden Head Jr. told Guirola after the Justice Department announced its plea bargain with the smuggler. “The punishment doesn’t fit the crime.... I don’t know what you were up to, but this conduct cannot be tolerated.”
Less than a year later, DEA agent Castillo and his informants were watching Guirola zoom in and out of Ilopango, hauling drugs in, carrying cash to the Bahamas, and flashing credentials from the Salvadoran Air Force and the Salvadoran president’s office. “When I ran Guirola’s name in the computer, it popped up in 11 DEA files, detailing his South America-to-United States cocaine, arms and money laundering,” Castillo wrote in his memoirs.
In response to a Freedom of Information Act request filed in 1997, the Customs Service claimed it could not locate any records relating to the Guirola case.
Castillo said that in January 1986 he began firing off a string of reports to DEA headquarters in Washington about the suspicious activities of the Contra pilots, listing their names, destinations, tail numbers, and criminal records. He got no replies, and no offers of assistance. It was, he wrote later, as if his reports were “falling into some faceless, bureaucratic black hole.”
But in late March 1986 Castillo got his first official confirmation that he was on the right track. A cable arrived from the Costa Rican DEA office reporting that a pilot named Carlos Amador was intending to fly into Ilopango, pick up cocaine at Hangar No. 4, and take it to Miami. Amador would be carrying Salvadoran government identification, which got him through Customs and any inspections. Castillo was asked to “investigate Amador and any persons or companies associated with Hangar No. 4.”
As Castillo would soon realize, that was easier said than done; he was about to plunge headlong into the darkness of one of the Reagan Administration’s most secret operations, a clandestine activity that Reagan privately predicted would result in him and his Cabinet being strung up by their thumbs on the White House lawn if word ever leaked out to the public. CIA records show that Hangar No. 4 had been used by the Agency for covert Contra operations until it was turned over in 1985 to the National Security Council and Oliver North’s illegal arms network, “The Enterprise.” CIA agent Felix Rodriguez also used the hangar for his helicopter-based counterinsurgency program. The adjoining hangar, No. 5, was still being used by the CIA in support of the Contra project.
Moreover, the suspected drug pilot, Carlos Amador, had been working with the CIA for years, flying missions for the Costa Rican Contras. The CIA had been collecting information for at least a year indicating Amador was also flying drug planes between Costa Rica, Panama, Belize, and Miami for a pair of major cocaine traffickers, the Sarcovic brothers, at the same time he was flying for the White House.
Excited that his investigation was finally starting to bear fruit, Castillo drove to El Salvador to tell his informants and the Salvadoran narcotics police the good news—he now had independent confirmation that their stories of Contra drug flights at Ilopango were true. Someone would finally start listening to them, Castillo exulted.
But the CIA had other ideas. Within weeks, cables were shooting off in a dozen directions as the Agency quickly tried to get a handle on the DEA agent’s investigation.
In April 1986 the CIA station in El Salvador sent a desperate message to the Costa Rican CIA office, asking if the DEA office there could be persuaded to back off.
“Hangar No. 4 at Ilopango was the location of Contra operations and...the El Salvador Station could assure that the only thing Amador and the other pilot had transported during their flights there was military supplies,” the cable stated. “Based on that information, El Salvador Station would appreciate Costa Rica Station advising DEA not to make any inquiries into anyone re: Hangar No. 4 at Ilopango since only legitimate CIA supported operations were conducted from this facility. FYI, Station air operations moved from Hangar No. 4 into Hangar No. 5, which Station still occupies.”
The CIA official who wrote that cable told the agency’s Inspector General that “his statement was not intended to thwart an investigation of activities in Hangar No. 4. He concedes, however, that the language in the cable could be read to suggest a meaning he did not intend.” Plus, that was the effect it had.
The official alarm was easily understood. Not only was someone like Carlos Amador strolling freely in and out of CIA-run hangars, but there was a host of other Contra traffickers milling about Ilopango, including Norwin Meneses and friends.
Enrique Miranda Jaime, who became Meneses’s emissary to the cartels of Colombia in the late 1980s, testified in a 1992 trial in Nicaragua that “Norwin was selling drugs and funneled the benefits to the Contras with help of high-ranking military officials of the Salvadoran Army, especially with the help of the head of the Salvadoran Air Force and a Nicaraguan pilot named Marcos Aguado.”
Aguado, the chief pilot for the ARDE Contra forces in Costa Rica, was identified in 1987 congressional testimony as a CIA agent. Soon after North set up his resupply operation at the air base, Aguado moved to Ilopango permanently, working as an aide to a high-ranking Salvadoran air force commander. The pilot, who had been instrumental in arranging the Contras’ 1984 arms-and-drugs deals with Colombian trafficker George Morales, was no longer welcome in Costa Rica, having been formally accused of cocaine trafficking. “Aguado became a colonel in the Salvadoran Air Force, sharing all the privileges of a high-ranking military officer in El Salvador and was accepted by subordinate ranks as Deputy Commander of the Salvadoran Air Force,” Miranda testified. “The flights he directed went as far as Colombia, where they were loaded with cocaine and then redirected to the United States, to a U.S. Air Force base located in the state of Texas.”
In interviews, Miranda and former Nicaraguan antidrug czar Roger Mayorga, who arrested Miranda, said the U.S. air base was near Fort Worth, but neither knew the name of it. The only air force base near Fort Worth at the time of the alleged drug flights from Ilopango was the nowclosed Carswell Air Force Base, the home of a Strategic Air Command bomber squadron. In response to a Freedom of Information Act request filed in 1997, the U.S. Air Force said all flight records that may have shown arrivals and departures of Salvadoran military aircraft during the mid-1980s were destroyed years ago.
Miranda, a former Sandinista intelligence officer who became a double agent for the CIA during the Contra war and has worked as a DEA informant in recent years, said the cocaine brought from Colombia by Medellín cartel pilots arrived in Costa Rica in square twenty-five-kilo packages. It was unloaded at various airstrips there, including one located on CIA operative John Hull’s farm in northern Costa Rica, where it was placed aboard Contra planes and flown into Ilopango.
Once it had arrived at the Salvadoran base, Miranda said, Aguado and Meneses supervised the loading of the cocaine onto U.S.-bound aircraft owned by the Salvadoran Air Force and, on occasion, a Miami-based CIA contractor, Southern Air Transport. Though Southern Air officials have vehemently denied involvement with drug smuggling, once suing a Florida TV station for daring to suggest such a thing, CIA and DEA records show that the airline was under investigation for drug trafficking by U.S. Customs in 1987. Further, Southern Air was “of record” in the DEA’s databases from 1985 through 1990 “for alleged involvement in cocaine trafficking...several of the firm’s pilots and executives were suspected of smuggling narcotics currency,” the DEA reported. Southern Air was once owned by the CIA.
Miranda testified that he met CIA pilot Aguado for dinner at Meneses’s mansion in Managua in 1991, where Aguado regaled them with tales of flying for the Colombian cartels. Aguado told him that he once took a Salvadoran Air Force bomber and leveled a warehouse full of Medellín cartel cocaine on behalf of the rival Cali cartel. Another time, he made plans to bomb the prison where Medellín cartel chief Pablo Escobar was briefly imprisoned. Aguado also boasted of flying weapons from the Salvadoran military to the Colombian cartels, a story Miranda said he doubted until a Salvadoran Air Force colonel and his associates were arrested in 1992 for selling bombs and high explosives to Colombian drug dealers.
Miranda said Meneses told him that U.S. military hardware stockpiled at Ilopango was loaded onto Salvadoran transport planes and flown south, where the guns were traded for cocaine and flown back to Ilopango. As wild as that scheme sounds, records show Enrique Miranda is not the first drug trafficker to have reported such a fantastic operation. During the 1980s the U.S. Justice Department received at least three other reports from reliable informants detailing arms-for-drugs swaps involving the Medellín cartel, the Contras, and elements of the U.S. government.
One of those informants, records show, was a member of Meneses’ drug ring, a boyhood friend who “had a long track record of providing information and was considered extremely reliable,” according to the Justice Department’s Inspector General. The friend was questioned in April 1986 by a DEA intelligence analyst as part of a secret DEA assessment of allegations that the Contras were involved in drug smuggling; he not only confirmed that Meneses was selling cocaine to raise money for the Contras, but said “some of these proceeds were used to buy weapons for the Contras in Colombia.” The DEA informant related that “Meneses had recruited him to coordinate drug and weapons shipments from Colombia...the drugs were shipped to the United States, sometimes through Nicaragua. Meneses boasted that he traveled in and out of Nicaragua freely and that U.S. agents would assist him.”
Another report of Colombian cocaine being traded for U.S. weapons surfaced less than two years later, during the 1988 debriefings of a Colombian trafficker turned government informant, Allen Raul Rudd, who was questioned by Justice Department officials and the U.S. Attorney’s office in Tampa, Florida.
In a February 1988 memo marked “Sensitive,” Assistant U.S. Attorney Walter E. Furr told his boss that Rudd “is a very articulate individual and there has been no indication to date that he has not been totally candid. In a real sense his life is on the line for the cooperation he has given so far.” Furr probably thought it necessary to add his testament to Rudd’s credibility in light of what he was about to report next: the Medellín cartel reportedly had made a deal with Vice President George Bush to supply American weapons to the Contras in exchange for free passage for their cocaine deliveries to the U.S.
Rudd told the officials that in the spring of 1987 he’d met in Medellín, Colombia, with cartel boss Pablo Escobar to arrange a drug deal. In the course of their conversation at Escobar’s palatial home, Rudd said, the cocaine lord began ranting about Bush and his South Florida Drug Task Force, which was making the cartel’s deliveries to the Miami area more difficult.
“Escobar then stated that Bush is a traitor who used to deal with us, but now he is tough,” Rudd told the federal officials. Escobar described “an agreement or relationship between Bush and the American government and members of the Medellín cartel which resulted in planes similar to C-130s (but smaller) flying guns to the cartel in Colombia. According to Rudd, Escobar stated that the cartel then off-loaded the guns, put cocaine aboard the planes and the cocaine was taken to United States military base(s). The guns were delivered and sold to the Contras in Nicaragua by the Cartel.”
Escobar, Rudd said, explained that “it was a swap of cocaine for guns...Rudd has stated that while Escobar did not say the CIA was involved in the exchange of guns for cocaine, that was the tenor of the conversation. Rudd has stated that Escobar and the rest of the cartel members are very supportive of the Contras and dislike the Sandinistas as they dislike the guerrillas which operate within Colombia.”
Rudd claimed that Escobar had photographic proof to back up his story. Not only were there “photographs of the planes containing the guns being unloaded in Columbia,” but he claimed to have a picture of Bush posing with Medellín cartel leader Jorge Ochoa, in front of suitcases full of money. “After Escobar talked about the photograph, Rudd said that if the photograph was not genuine (and was merely two individual photographs spliced together somehow) it would be easily discredited,” Furr wrote. “In response, Escobar stated that the photograph was genuine, it would stand up to any test...Escobar stated that the photo would be made public at the ‘appropriate time.’ Rudd indicated that the photo is being held back as blackmail if the cartel ever needs to bring pressure on Bush.”
By 1993 Escobar was dead, killed in a shoot-out with Colombian police, and Jorge Ochoa was in jail. The photos, if they ever existed, were never heard of again.
Rudd’s story is very similar to one told by a Miami FBI informant, Wanda Palacios, who reported in 1986 that she had witnessed Southern Air Transport planes being loaded with cocaine and unloading guns in Barranquilla, Colombia, in 1983 and October 1985. Palacios, the wife of a Colombian trafficker, said she’d accompanied Pablo Escobar in a limousine to the landing site and had spoken about it as well to Jorge Ochoa, who bragged that he was working with the CIA to get cocaine into south Florida.
Palacios was interviewed in 1986 by the staff of Senator John Kerry of Massachusetts, which was looking into allegations of Contra drug smuggling. Kerry’s staff found her and her story credible and took an elevenpage statement from her. The senator and an aide took it to the Justice Department in September 1986, and met with William Weld, one of Attorney General Edwin Meese’s top assistants.
“Weld read about a half a page and chuckled,” Kerry aide Jonathan Winer wrote in a memorandum after the meeting. “I asked him why. He said this isn’t the first time today I’ve seen allegations about CIA agent involvement in drugs...he stated several times in reading Wanda’s statement that while he couldn’t vouch for every line in it...there was nothing in it which didn’t appear true to him, or inconsistent with what he already knew.”
But when her allegations leaked out to the press, Palacios was publicly dismissed as a crank by top Justice Department officials, who said polygraph tests she’d been given were “inconclusive.” Southern Air Transport called her “a lunatic” and sued or threatened suit against news organizations that aired her allegations.
Her story was buttressed mightily by subsequent events, however.
When the Sandinistas blew a Southern Air Transport C-123K out of the sky over Nicaragua in early October 1986, the dead pilot’s flight logs revealed that he had flown several Southern Air Transport flights to Barranquilla, Colombia. The flights had occurred during October 1985, exactly as Palacios had claimed, and she was able to identify the pilot’s picture in a lineup. Southern Air said in a statement that the planes were carrying drilling equipment, not drugs.
The wrecked C-123K in which those flight logs were found had a history of involvement with cocaine, the Medellín cartel, and the CIA. It was the same airplane Louisiana drug dealer Barry Seal used in a joint CIA-DEA sting operation in 1984 against the Sandinistas. In that case the CIA had taken Seal’s plane—which he’d recently obtained through a complicated airplane swap with the cartel—to Rickenbacker Air Force Base in Ohio and outfitted it with hidden cameras. Then Seal, who was working as a DEA informant, flew the aircraft to an airfield in Nicaragua and snapped pictures of men loading bags of cocaine into his plane.
One of Seal’s grainy, almost indistinguishable photos was later shown on national television by President Ronald Reagan the night before a crucial vote in Congress on Contra aid. “This picture, secretly taken at a military airfield outside Managua, shows Federico Vaughn, a top aide to one of the nine commandantes who rule Nicaragua, loading an aircraft with illegal narcotics, bound for the United States,” Reagan announced. “No, there seems to be no crime to which the Sandinistas will not stoop—this is an outlaw regime.”
But declassified CIA records show the Reagan Administration knew there was precious little to substantiate that. Even with the entire CIA contingent in Central America on the alert for Sandinista drug dealing, no evidence had been found. “Although uncorroborated reports indicating Nicaraguan involvement in the shipping of cocaine to the United States had been received, CIA was unable to confirm reports implicating high-level Sandinistas in drug trafficking,” the CIA informed the Senate Select Committee on Intelligence in April 1984. Two years later, Justice Department officials reached the same discouraging conclusion.
A 1988 congressional investigation raised troubling questions about whether or not the Seal sting was even a real sting. It produced evidence suggesting that the whole episode had been stage-managed by Oliver North and the CIA as a domestic disinformation operation. Among other things, the House Judiciary Committee investigation revealed that the alleged Sandinista official named by Reagan, Federico Vaughn, may have actually been working for the U.S. government. Committee chairman William Hughes of New Jersey told reporters that “subcommittee staff recently called Vaughn’s number in Managua, Nicaragua, and spoke to a ‘domestic employee’ who said the house belonged to a U.S. Embassy employee,” and that his investigators were told the house had been “continuously rented” by the United States since 1981.
Recently declassified CIA cables lend additional support to the idea that Vaughn was in fact a U.S. double agent. In March 1985 the CIA reported that Vaughn “was said to be an associate of Nicaraguan narcotics trafficker Norwing [sic] Meneses Cantarero.” Meneses at that time was working with the DEA in Costa Rica, assisting the Contras. And Oliver North’s daily diaries for that period contained several references to “Freddy Vaughn,” including a July 6, 1984, entry that said, “Freddy coming in late July.”
Far from being a “top aide” to a Sandinista commandante, Vaughn was a deputy director of Heroes and Martyrs Trading Corporation, the official import-export agency of the Sandinista government, a firm that had been heavily infiltrated by CIA operatives. Records show that one of the Costa Rican-based drug traffickers working for North and the CIA, Bay of Pigs veteran Dagoberto Nuñez, obtained a contract with H&M Corp. in order to cover an intelligence-gathering operation aimed at Nicaraguan president Daniel Ortega, his brother Humberto, and Interior Minister Tomas Borge. According to a 1986 memo from CIA operative Rob Owen to North, Nuñez was preparing to sign an agreement with H&M for shrimping rights off the Pacific Coast of Nicaragua. “Nuñez is doing this so he can help us. He will cooperate and do anything we ask,” Owen told North. “He believes this will provide an opportunity to use his boats for cover operations, or to implicate the Ortegas and Borge in taking money on the side for their own pocket. He is right on both counts.”
Four DEA officials testified before Hughes’s committee that they’d received pressure from North and the CIA to leak the news of Vaughn’s involvement with drugs to the press. They also said North wanted to take $1.5 million in drug profits Seal had collected from the Medellín cartel and give it to the Contras. When the DEA refused to do either, the DEA officials testified, the story was leaked by the White House to the rightwing Washington Times, which was supporting the Contras both financially and editorially.
The leak accomplished two things. It publicly linked the Sandinistas to drug trafficking right before a crucial Contra aid vote. And by prematurely exposing the sting, it blew the DEA’s investigation of the Medellín cartel, which DEA agents said had been their most promising chance ever to break up the Colombian drug conglomerate. The drug lords went free, and Vaughn disappeared.
“The [Seal] sting operation has North’s fingerprints all over it,” columnist Jefferson Morley wrote in the L.A. Times in 1986.
After Seal flew his CIA/DEA missions, he never used the C-123K cargo plane again, parking it at the tiny Mena, Arkansas, airport for a year, then selling it back to the same company he’d gotten it from originally. In early 1986 it wound up with CIA contractor Southern Air Transport, where it was used for Contra supply runs and based at Ilopango until its last, fatal flight.
Unfortunately, the informants’ allegations of a guns-for-drugs deal between the Reagan administration and the Medellín cartel were never seriously investigated. The memo of Rudd’s debriefing was sent to Iran-Contra prosecutor Lawrence Walsh by the Department of Justice a month later, with a note from Associate Attorney General Stephen S. Trott, which said that “no action is being taken by the Department pending a determination by your office as to whether you intend to assert jurisdiction.” Walsh’s office apparently just filed the memo away; National Archives researchers found it while working their way through the Iran-Contra prosecutor’s closed investigative files.
One of the lawyers who worked for Walsh told the CIA in 1997 that investigating Contra drug dealing comprised “only about one percent” of the Walsh probe’s interest. “For the most part,” the CIA reported, “any drug trafficking activity would have been ‘stumbled on’ in the course of the investigation of other issues, especially money laundering.”
In an interview, Walsh said he tried to stay away from the Contra drug trafficking issue as much as possible because it was outside his jurisdiction and because he knew Senator John Kerry’s Senate subcommittee was investigating the topic. But it appears that Walsh’s office never passed the Rudd memo along to Kerry’s investigators.
Castillo’s investigation into Contra drug dealing at Ilopango met with a similar fate, thanks to the activities of the American ambassador in El Salvador, Edwin Corr, to whom Castillo was regularly reporting. Corr said he thought Castillo “was a very professional and a good agent” and had no reason to doubt what Castillo was telling him about what was going on Ilopango. But, Corr told Justice Department investigators, Castillo was making a lot of people nervous, including him, because his investigation had the potential to “destroy relationships with Salvadoran officials that had taken so long to build.”
Worried, Corr sent a secret “back channel” cable to the State Department requesting an internal DEA review of Castillo’s allegations. The DEA, he said, informed him that “a lot of [Castillo’s] information was just totally inaccurate” and Castillo soon was “told by his superiors to close his investigation...and move onto something else.” But Corr said the headstrong agent “continued to snoop around the airport and make allegations” until the Ambassador was personally forced to take matters in hand.
Corr said he ordered Castillo to “stop the witch hunt” and warned him that “they were dealing with a very sensitive matter and Castillo would have to take care not to make false allegations.” Just what was false about the allegations Castillo was investigating isn’t clear; indeed, most of his information has since been corroborated by the CIA and the traffickers.
Castillo now suspects that the Costa Rican DEA cable alerting him to Contra drug trafficking at the two hangars was less a request for him to investigate it than a way to cover the DEA office in Costa Rica in case his investigation got anywhere. Since Castillo had been sending his Contra drug reports to Washington for months, it is likely they were being shared with Nieves, the top DEA official in the country where the drug flights were allegedly originating.
If, as Meneses aide Miranda claims, the Ilopango operation was part of Meneses’s drug pipeline into the United States, Castillo’s probe might have raised some very sticky questions about how well the DEA was monitoring its top-level informant.
Denied access to the military side of Ilopango, Castillo settled on another tactic: he would hit an off-base location linked to the Ilopango operation. He and his informants zeroed in on a likely suspect: a New York weapons dealer and U.S. military contractor named Walter “Wally” Grasheim. The tall, bearded arms broker was the Salvadoran sales representative for the Litton Corp. and other American weapons makers, and had a booming business selling night vision goggles, Steyer sniper rifles, and assorted other gear to the Salvadoran military. He was also advising and training Salvadoran army units in long-range reconnaisance operations on behalf of the U.S. government. One of Castillo’s informants at Ilopango told him Grasheim was intimately involved with the Contra drug operation there, and Castillo claims that DEA computers turned up several references to Grasheim as a suspected drug trafficker.
On September 1, 1986, Salvadoran police working with Castillo raided Grasheim’s elegant hillside home in San Salvador. A pound of marijuana was reportedly found, but that was nothing compared to what else was in the place. “Some of the rooms in the house had munitions and explosives piled to the ceiling, including automatic weapons, M-16’s, hand grenades and C-4 [plastic explosives],” Castillo later told the FBI. “The raid at Grasheim’s house uncovered Embassy license plates, radios and ID’s in Grasheim’s name. Castillo...showed Grasheim’s U.S. Embassy ID to the interviewer.”
Grasheim, who says the weapons were legally his, strenuously denied he had anything to do with either the Contras or drugs and believes Castillo was duped by his informants, whom he says were secretly working for the CIA. “The Agency put Castillo onto me as a way of getting him away from whatever it was they were doing at Ilopango,” Grasheim insisted in an interview. “The person who claimed I was a drug trafficker was on the payroll of the CIA. I’ve never been involved with drugs in my life.” The marijuana found at his house, Grasheim said, probably belonged to a U.S. Army colonel who was a frequent visitor.
According to the Justice Department Inspector General’s report, Grasheim is not entirely wrong. Castillo’s informant, the ever-helpful Murga, was indeed working for the CIA and had been for quite some time. And soon after he put Castillo on Grasheim’s trail—fingering him as “head of smuggling operations at Ilopango”—the CIA decided to take Murga back.
Castillo’s boss, Robert Stia, “recalled being asked by the CIA station chief in El Salvador to relinquish the use of informant STG6. The Station Chief had explained that the CIA had established the informant before he had ever worked for the DEA” and wanted the DEA to stop using him because “he was currently a CIA informant.” Stia complied, but complained internally that the CIA had cost the DEA a valuable asset.
Though Castillo’s 1986 investigation was killed, he picked up word three years later that Hangar No. 5 at Ilopango was once again being used for drug trafficking, this time by members of the Salvadoran Air Force. He opened up another investigation, much to the irritation of U.S. Embassy personnel, who regarded Castillo with hostility due to his “reputation as a man who is always digging up things,” the Justice Department Inspector General reported.
This time the CIA intervened directly and refused to allow Castillo to set foot on Ilopango. When Castillo asked how he was supposed to investigate drug trafficking allegations if he couldn’t get on the airbase, a CIA officer told Castillo that it was “not necessary” because the CIA was on the case. “The CIA Chief of Station assured [Castillo] that there was no drug activity associated with Hangar No. 5,” the Justice’s Inspector General wrote.
In an ironic turn of events, Castillo soon found himself under investigation by the DEA. He spent the next five years fending off accusations that he had gotten too close to his Central American informants, accepted improper gifts, inappropriately handled firearms, and a number of other technical, administrative failures. Castillo’s boss complained to his superiors that the charges against Castillo were unfair, and ultimately the DEA gave Castillo a disability retirement. In his 1994 memoirs, he blamed the fallout on his investigation of Ilopango.
The DEA declined to respond to questions about Castillo, and in response to a Freedom of Information Act request, it claimed it had no reports from Castillo about drug trafficking at the Salvadoran air base. Like so much of what the DEA has said about Castillo and Ilopango over the years, that was a lie. The Justice Department Inspector General had no trouble locating the agent’s reports and quoted from them liberally.
The quashing of Castillo’s investigation ended any official U.S. government interest in trafficking at Ilopango. But the issue refused to stay buried. At the same time the Contra drug pipeline in El Salvador was being hastily covered back up, police officers thousands of miles away in Los Angeles were starting to prying the covers off the other end of it.
As one of them would sadly remark ten years later, they had no idea what a Pandora’s box they were opening.