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Gag order concealed possible CIA drug ties
But records were copied secretly
Published: Sept. 29, 1996
BY GARY WEBB
AND PAMELA KRAMER
Mercury News Staff Writers
A legal motion filed in a 1990 police corruption trial in [Other stories]
Los Angeles indicates that the drug ring of former
Nicaraguan government official Danilo Blandon -- which South
helped fuel the crack cocaine explosion in black America Central
-- was connected to the Central Intelligence Agency and residents
efforts to launder drug money to finance anti-communist condemn
Nicaraguan rebels. CIA's
reported
Ten pages of records seized from a money launderer tied to role
Blandon were ordered sealed in that case. Court records Published:
show the defense attorney who had the papers was hit with Sept. 29,
a gag order shortly after he revealed their existence. 1996
U.S. Representative Maxine Waters, D-Los Angeles, said she
will immediately seek to have the documents made public Activist
since they could provide evidence of government vows to
involvement in cocaine trafficking. continue
protests
Los Angeles attorney Harland W. Braun said Friday he was over alleged
given the documents by an officer who had participated in CIA-crack
their seizure and copied them without the government's link
knowledge. Braun said he read the documents before turning Published:
them over to the court, and that he based his motion on Sept. 27,
the records, and from statements from two of the officers 1996
who conducted the search.
Previously
The exact nature of Blandon's connection to the CIA has published
been a matter of considerable debate since a Mercury News postscript
series last month revealed his role in flooding South stories
Central Los Angeles with cocaine in the 1980s. Blandon, a Last
marketing expert who now works as an informant for the updated:
Drug Enforcement Administration, has testified that he was Sept. 28,
one of the founders of the Los Angeles branch of the 1996
Nicaraguan Democratic Force, a guerrilla army created and
run by the CIA. Gary Webb
radio and TV
He has testified that after he met with the CIA agent who appearances
ran the army's military operations in late 1981, he began Last
selling cocaine in South Central to raise money for that updated:
army. His biggest customer, he testified, was legendary Sept. 28,
L.A. drug dealer ''Freeway'' Rick Ross, who turned 1996
Blandon's cocaine into crack and sold it to the Crips and
Bloods street gangs. The original
series
CIA director John Deutch has said that Blandon had no Published:
relationship with the CIA, and a CIA spokesman has called Aug 18-20,
the Mercury News series ''ludicrous.'' 1996
But the motion filed six years ago in the corruption trial
of former L.A. County Sheriff's Deputy Daniel Garner says [document link]
Blandon's drug operations were aligned with the spy Biographical
agency. information
on Oscar
Danilo
Blandon and
Rick Ross
[document link]
Motion
regarding
government's
request for
restraining
order
Drug raid
In late October 1986, Blandon's home and several other
locations in suburban Los Angeles were raided by L.A.
County narcotics detectives. According to the search
warrant affidavit, the deputies believed Blandon was
selling cocaine and laundering large sums of money ''to
buy arms for the Contra rebels in the war in Nicaragua.''
Blandon, his wife, Chepita, and several other Nicaraguans
were arrested on narcotics and weapons charges.
Deputy Garner participated in those raids, according to
Braun, a prominent defense attorney who has handled cases
ranging from the Rodney King civil trial, where he
successfully represented an officer charged in the
beating, to the fatal Twilight Zone accident case. Garner
and several other members of the 1986 raid team were later
caught up in a corruption scandal that swept the sheriff's
drug units. He and nine other officers were indicted in
1990 on charges of stealing more than $1.4 million in
seized drug cash.
During Garner's trial, according to an Oct. 24, 1990 story
in the Los Angeles Times, Braun told reporters that he
could prove ''that the U.S. government was laundering drug
money for South American cartels and siphoning some of the
cash for its own clandestine operations abroad.'' Braun
said he hoped that by making the CIA an issue in the case,
federal prosecutors would drop the charges against Garner.
But prosecutors immediately asked U.S. District Judge
Edward Rafeedie to issue a gag order to keep defense
lawyers from talking about the case, records show. Braun
filed an unsuccessful motion to fight the order. The gag
order expired at the end of the trial.
In the motion, Braun stated Garner's raid team burst into
the house of a ''money launderer who they knew was
associated with a major drug and money laundering ring
connected to the Contras in Nicaragua. Notification was
made to the federal government that the search warrant was
going to be served ... When the search warrants were
served, the houses were found substantially vacated.''
Lots of evidence
But the police hardly came away empty-handed.
''Officers discovered films of military operations in
Central America, technical manuals, information on
assorted military hardware and communications and numerous
documents indicating that drug money was being used to
purchase military equipment for Central America,'' Braun's
motion stated. ''Officers also discovered blown-up
pictures of the suspect in Central America with the
Contras showing military equipment and military bases ...
Officers also pieced together the fact that this suspect
was also working with the Blandon family, which was
importing narcotics from Central America into the United
States.''
When the police first arrived at the house, Braun wrote,
''the suspect identified himself as a CIA agent, gave the
name of his CIA contact in Virginia and requested that the
(police) confirm his status and leave the premises. The
suspect was allowed to call Virginia and notify the
Central Intelligence Agency, but the officers took the
position that they had a search warrant and they would
continue to obey the orders of the court.''
In the 1990 Times story about the gag order, a CIA
spokesman said the agency ''has not and has never been
directly involved in laundering money.''
Within 48 hours of the man's records being seized, Braun's
motion stated, ''federal agents swooped down on the
sheriff's headquarters and removed all the recovered
property. Mysteriously, all records of the search, seizure
and property also "disappeared' from the sheriff's
department.''
When the Mercury News requested the case files last year,
a sheriff's department spokesman, Ron Spear, said they
could not be found.
Documents preserved
''Unbeknownst to the federal government,'' Braun wrote, [document link]
''10 pages of the documents seized from the CIA operative Mention of
were copied and preserved. These documents give the name State
of CIA operatives in Iran, specifically mention the Department
Contras, list various weaponry that was being purchased, in Senate
and even diagram the route of the drug money out of the Committee
United States, back into the United States purchasing Report on
weaponry for the Contras as well as naming the State Drugs, Law
Department as one of the agencies involved.'' Enforcement
and Foreign
Copies of the 10 pages seized from the money-launderer Policy
were submitted to Judge Rafeedi under seal, according to
Braun, who said they are still being held in secret. Braun
said he did not keep copies.
While Braun's motion doesn't identify the suspect by name,
the 1986 search warrant affidavit for the raids identifies
two men who police believed were laundering and
transporting money for Blandon's cocaine operation. They
are:
--- Nicaraguan businessman Orlando Murillo, an economist
and former Miami resident now running for the Nicaraguan
Congress. Murillo, an uncle of Blandon's wife, was the
Nicaraguan representative of two Swiss banks for more than
12 years and was a member of the Central Bank of Nicaragua
-- similar to the U.S. Federal Reserve Bank -- under the
government of the late dictator Anastasio Somoza.
Corporate records show Murillo was a vice president of a
Miami-area brokerage firm identified in the 1986 search
warrant affidavit as the bank through which Blandon
laundered money for the Contras.
''I have never been involved in drugs and I have never
been involved in the Contras,'' Murillo said in an
interview Friday from Managua. ''I am a serious person and
I have a good reputation.'' Corporate records show one of
the Los Angeles companies raided by the deputies was owned
by Murillo and the Blandons.
--- Former Laguna Beach burglary detective Ronald J.
Lister, who quit the police force in the early 1980s. He
started a security firm that, according to a former
company official, had a U.S. government contract to
protect a military airbase in El Salvador.
''Ronald Lister ... sells cocaine for the Blandon
operation and transports money to Miami. He has turned
over a residence at 796 Deer Trail, Crestline, to Blandon.
The house now belongs to Orlando Murillo, Blandon's uncle
and money laundered (sic) in Miami. Cocaine is regularly
stored at this Crestline location,'' the affidavit states.
Murillo acknowledged knowing Lister, calling him ''a drug
dealer'' he met through Blandon. Murillo also confirmed
that the house was in his name, but said Blandon did that
without telling him.
Recently declassified FBI records say Lister claimed in
late 1986 to be a CIA agent and said he was raising funds
for the Contras.
Shortly after the raids, FBI records say, Blandon's [document link]
defense attorney, Bradley Brunon, called the sheriff's FBI Teletype
office and told them the ''CIA winked at this sort of regarding
thing ...(Brunon) did not specifically discuss drug conversation
trafficking or arms sales but only referred generally to with Ronald
the activities of Blandon and Lister.'' Lister's
real estate
Neither Lister nor Garner, both recently paroled from agent
federal prison, could be reached for comment. Lister
pleaded guilty to cocaine trafficking in January 1991 and
Garner was convicted of the corruption charges in December
1990.
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