Reagan and Bush's Not-so-Secret War: Part 5

Provisioning the Nicaraguan Contras

Supplying the Nicaraguan Contras was a major priority for C.I.A. Director William Casey, who sometimes carried out his own foreign policy. Casey essentially carried out his own foreign policy and was repeatedly successful in blocking George Schultz’s arms control efforts. Casey and the NSA also undermined Schultz’s position on bargaining to retrieve hostages. The C.I.A. and NSA dealt not only with Iran but terrorists who held Father Lawrence Jenko and other hostages. On the other hand, Schultz unsuccessfully tried field as peace plan for Nicaragua, thus attempting to end Casey and North’s secret war there.

Casey did all he could to assist Oliver North carry on support for the Nicaraguan contras, while barely staying within the law. After the Boland Amendment became law, Casey was very careful what he did about Nicaragua and he told potential Contra donors they would have to talk to Ollie North. He even signed a document for the Senate intelligence Committee promising he would remain within the law. While some in the C.I.A. approved of Casey’s aggressive policies, others dreaded another round of Congressional investigations and new restrictions and tried to circumscribe some of his most risky policies.

Disgusted with Congressional restrictions, he dreamed of the day when the C.I.A. would be a self-financing, “full-service agency.” To reach self-financing status, he accelerated efforts of the agency to enter private business. There is no way of knowing if he knew of C.I.A. involvement in the drug grade.1


Much of the supply effort was coordinated by Lt. Colonel Oliver North, a deputy in the office of the National Security Advisor. A number of former C.I.A. agents played important roles, as did C.I.A. contractors in central America. At first, it appeared that the C.I.A. was permitting the Contras to bring cocaine into the United States to pay for weapons.

The agency and Justice Department repeatedly shielded US drug dealers who were acting as distributors for the Contras.2 The C.I.A.’s Inspector General testified much later that between 1982 and 1995, the agency had an agreement with Justice hat it did not have to report drug dealing on the part of its assets. Janet Reno classified as top secret the department’s investigation of C.I.A. drig trading/ 3
By late 1985 or 1986, it was clear that the drug trade was being coordinated out of Washington. The operation had become so large that elaborate money laundering schemes in the US had become necessary. Many of those involved in this drug trade were Cuban ex-patriots who were timed to US intelligence work since the Bay of Pigs invasion. There is significant evidence that it also became necessary to share profits with some politicians, mostly Republicans. 4

Of far greater importance was the elaborate executive infrastructure, answerable to Vice President George H.W. Bush, to secretly supply the right-wing Contras. Congress cut legitimate aid to a trickle with the two Boland Amendments, making all other assistance of any sort, including the use of US personnel illegal. Another breach of the law occurred in the Reagan-Bush, Sr., years. The NSC and C.I.A. violated the law by advising and provisioning the Contras in Nicaragua.

They used US military personnel in some operations against Nicaragua, a violation of the Neutrality Act, which forbids use of force against nation with whom the US is at peace. Later, the violation of the law was compounded when Congress legislated against supplying the contra rebels in Nicaragua. Almost certainly, Bush was deeply involved in operational problems. The complexity of this mechanism was necessary in order to give as many people as possible deniability and to circumvent laws requiring the C.I.A. to report its covert operations to Congress –

A year later, a subgroup was created to deal with terrorism (NSDD-30). It was called the Terrorist Incident Working Group. The agencies involved were Department of Defense, F.B.I., C.I.A., and NSC staff. In 1984, Reagan signed NSDD-138, which gave TIWG greater power and the ability to form subgroups. It formed Operations Sub-Group-1 under Ted Shackley; it was the “anti-narcotics group.” OSG-2 was headed by Lt. Colonel Oliver North and was concerned with anti-terrorism. OSG-3 was “our ‘alignment’ group,” under General Richard Secord. It dealt with troublesome agents and others.

At its peak, there were 80 operatives from the US, Israel, Turkey, Britain, and Denmark. It predates the Reagan administration, but what is unique about it is that it is now directly controlled by the Vice President. . In 1987, the Iran/Contra scandal made it necessary for him to step aside. Secord took over his group, and Gene “Chip” Tatum took over the alignment group. From the beginning of SSG, Bush drew upon the advice of his assistant Donald Gregg and representatives of British and Israeli intelligence. In 1984, Dewey Claridge, who had been running C.I.A. operations in Central America, was transferred to Europe. This was also the year a second and tougher Boland Amendment was passed. The first amendment passed the House December 8, 2002, 411-0.5 It is very there would have been no dissent on this kind of vote in subsequent years, when the New Right became a major force in the Republican party.


It is likely in the 1980s that many secret black operations were coordinated by entities under the control of Vice President George H..W. Bush. He chaired the Task Force on Combatting Terrorism, why served as that launching pad for many illegal activities of Lt. Colonel Oliver North and others in Central America. In 1981, President Ronald Reagan signed National Security Decision Directive-3( -3), entitled “Crisis Management,” which established a Special Situation Group headed by the vice president to deal with terrorism and other matters. Secretary of State George Schultz made it clear he did not agree with this directive. The SSG essentially stood between Reagan and the Secretary of State, ranking far above other interagency groups.

This and subsequent NSDDs effectively placed Vice President George H.W. Bush in charge of US intelligence operations. Moreover, they erected an asbestos wall between Bush, Donald Gregg, his national security advisor and secret and illegal activities being carried out in Central America in the name of the United States. By employing National Security Decision Directives , Reagan effectively kept secret a large part of American foreign policy as NSDDs do not have to be revealed to Congress. 6

The covert war in Central America in some ways laid the foundations for America’s future imperial adventures in the Middle East. Some intelligence was cooked, and administration actions ere covered by the claim that the Communists and their allies were resorting to terrorism. Otto Reich, Elliot Abrams, and Ambassador Jean Kirkpatrick gave the public buckets of misinformation about the murders of unarmed men, nuns—more than twenty of whom were thrown out of helicopters-- women, and children. John Negroponte, then ambassador to Honduras, deceived Congress about all this while playing a major role in the Central American black operations Ambassador Negroponte hid and protected the grisly crimes of General Gustavo Alvarez Martinez, army chief who had promised to employ the same bloody tactics used by neo-Nazis in Argentina.

Indeed, Negroponte played a role in establishing Battalion 3-16, which carried out many barbaric crimes. Negroponte said Alvarez for his “dedication to democracy,” and Ronald Reagan gave the general the Legion of Merit medal. During Negroponte’s term there, civilian deaths reached into the tens of thousands as “special intelligence units” or death squads roamed the land. 7

These clandestine operations involved very serious breaches of the law in the Reagan-Bush,Sr., years. The NSC and C.I.A. violated the law by advising and provisioning the Contras in Nicaragua. They used US military personnel in some operations against Nicaragua, a violation of the Neutrality Act, which forbids use of force against nation with whom the US is at peace. Later, the violation of the law was compounded when Congress legislated against supplying the contra rebels in Nicaragua.

Almost certainly, Bush was deeply involved in operational problems. It is also abundantly clear that the NSC and C.I.A. helped and protected the Contras to bring drugs into the United States as a way of financing their operations. There is considerable evidence that the C.I.A. itself did more than watch and help these operations. The irony is that after moving tons of drugs into the United States to finance the contras, the problem in Nicaragua was solved by threatening Sandanista leader Daniel Ortega" family. He was told that his second cousin, a very close friend, would -be killed on a certain day if Ortega did not announce free elections. After his cousin was murdered, he backed down. It is difficult to understand what those involved in these activities thought democracy demanded of them. Perhaps Lt. Colonel Oliver North’s secretary, Fawn Hall, spoke for them when she said they were obeying a “ higher law.” Two decades later, those who took a similar view of the rights of the executive branch of government were talking about inherent powers of the president which exceeded those concretely spelled out in legislation or the constitution.

There does not seem to be any clear evidence about exactly when the C.I.A. started to use drugs to pay for weapons in Central America. It is clear that Argentine-trained right-wing forces in Central America were financing their operations through the sale of drugs by 1980. But the evidence is unmistakable that the C.I.A. eventually sold or permitted to be sold drugs to support the Contras. In time, it became clear to some White House operatives that the contra leaders saw their activities as essentially a business, yet nothing was done to reign them in make them more accountable.

In the 1997 Senate hearings, memos of General Paul F. Gorman , head of Southern Command, were read. In one, he said, : “There is not a single group in unconventional warfare that does not use narcotics to fund itself.” 8 In a civil case deposition, it was revealed that the C.I.A. laundered some drug money through the Republic National Bank and relied on one of its officers, Nan Morabia. When Oliver North needed cash, Morabia's husband and son would deliver bags with hundreds of thousands of dollars to North operatives in New York hotel rooms. These cash drops were carried out to circumvent federal currency laws. North also moved money through Swiss accounts and a Costa Rican seafood company, Figorificos de Pntarenas. 9