Home History CIA & Crack: DEA agent blows the whistle

CIA & Crack: DEA agent blows the whistle


Claims linking Contras, drugs, El Salvador revived by @thetrutherus 2017

Originally Published: Nov. 30, 1996


WASHINGTON — Ten years ago, El Salvador’s Ilopango Air Base served as
the major depot for American aid pouring south into a secret war against
Nicaragua’s Marxist Sandinista regime.

A former federal agent charges that Ilopango also served as a key
transit point for smugglers flying
narcotics back north, some of whom flew for the U.S.-backed Contras.

Former Drug Enforcement Administration Agent Celerino Castillo III
said that while the White House
ran its covert war, he ran his own secret operation — and that his
informants found a startling mix of
arms, narcotics and money at Ilopango.

Castillo, now retired and living in McAllen, Texas, said he found that
many pilots flying for the Contras
were listed in DEA records as suspected smugglers.

”I found that other agencies were sleeping with my enemy,” Castillo
said in a recent interview. ”They
knew these guys (pilots) were suspected drug traffickers, and hired them

Former officials at the base deny permitting or condoning smuggling.

”It is absolutely false and all … (expletive),” said former CIA
agent Felix Rodriguez, who ran the Contra resupply effort at Ilopango
for the Reagan White House’s National Security Council.

When Castillo first published his allegations, in a 1994 book titled
”Powderburns,” they got little

More recent allegations of possible CIA complicity in the cocaine
trade, made most prominently by the
Mercury News, have raised new interest in Castillo’s account. During a
Senate Intelligence Committee
hearing last week, members of the audience shouted demands for an
investigation of the Texan’s charges.

Some government officials say Castillo is getting more attention than
he deserves. They say his evidence
is thin and his credibility is questionable.

He retired on a psychiatric disability pension after a DEA therapist
said he suffered from post-traumatic
stress syndrome induced by his duties in Central America.

Information gathered by the Dallas Morning News in Washington, Texas,
Panama and El Salvador indicates that during his Central American
service Castillo was rated as a dedicated and capable agent and that he
had grounds for thinking that the United States was knowingly working
with smugglers.

The Dallas Morning News spoke with Castillo’s informants, with some of
his supervisors and with an
accused smuggler who flew out of Ilopango.

The paper also reviewed previous congressional hearing records and
some still-secret government
documents by and about Castillo.

Castillo’s two chief informants had intimate knowledge of Ilopango and
its military overseers. They had access to its records. And they
confirmed that they told Castillo that the airport was often used by
drug smugglers and by drug-money couriers.

Even those informants say it was difficult to reach firm conclusions
about the secrecy-shrouded Contra

They knew some pilots were smuggling, but could not discover whether
they were flying for the Contras. They knew some pilots were flying for
the Contras, but could only assume that they were smuggling.

”We did not always have the proof,” said one of Castillo’s Ilopango

Former Marine Lt. Col. Oliver North, who managed the Contra operation
for the National Security Council, said last week that if rogue
operators smuggled, they did so unbeknownst to their superiors.

”It was not U.S. policy,” North said.

Former DEA Director Jack Lawn agreed. ”There may have been …
individuals who claimed to be for
the Contras who were trafficking, but we saw no pattern,” he said.

On the other hand, several experienced congressional investigators say
Castillo’s information makes sense.

”Castillo’s stuff about Ilopango fits,” said John Mattes, a former
investigator for the Senate Subcommittee on Terrorism, Narcotics and
International Communications. Its chairman, Sen. John Kerry, D-Mass.,
probed Contra smuggling allegations in the late 1980s.

Former CIA Director Robert Gates, who ordered a probe of drug allegations in 1986, said smuggling
was ”abhorrent to the people who run the CIA.”

Agents suspected of narco-trafficking faced prosecution, he said in a
telephone interview. ”We all have kids, too.”

But, he added, the CIA could not fully control everyone involved in a
major operation. ”The people you deal with are often independent
operators … And sometimes you have to work with people you don’t
want to bring home to mother.”

Jack Blum, chief counsel for Kerry’s probe, came away from that
investigation convinced that the CIA did not have agents in Latin America ”selling drugs to fund the

But, Blum noted, ”There were facilities that were needed for running
the war — clandestine airstrips, cowboy pilots who would fly junker airplanes, people who would make
arrangements for the clandestine movement of money … Every one of those facilities was perfect for someone in the drug business.”

Some U.S. government officials knew that smugglers were taking
advantage of the war and ”protected them from law enforcement,” Blum added.

Several witnesses told the Kerry committee that some policy-makers
placed a lower priority on stopping narcotics than on fighting

Rank-and-file investigators sometimes found ”senior officials of the
U.S. government kind of looking away because essentially of the
obsession with (communists in) Nicaragua,” said Francis J. McNeil,
former deputy assistant secretary of state for intelligence and

He noted that in 1986, eight top officials, led by North, persuaded a
federal judge to grant a lenient sentence to Honduran Gen. Jose Bueso-Rosa, who had confessed to
importing $40 million worth of cocaine to fund the assassination of Honduras’ president.

In a later-declassified memo, North wrote that unless the general got
lenient treatment, he might start ”singing songs nobody wants to hear”
about the Contras.

As the supply center of the covert war, Ilopango quickly drew a woolly
bunch of patriots and pirates.

One pilot often accused of smuggling told the Dallas Morning News that
planes from the north brought weapons and supplies to Ilopango.

But the smaller planes assigned to pick up and deliver those supplies
to isolated Contra bases were sometimes used for drug smuggling as well, the pilot said.

Speaking on condition of anonymity, the pilot said he twice saw bags
that he thought contained drugs loaded into Contra aircraft.

Once, the pilot said, a local CIA officer arrived with the bags and
watched the loading through binoculars.

”But this was not the CIA, per se, running the operation,” the pilot  said. ”These guys (the smugglers) were in it for themselves.”

Another pilot, Gary Wayne Betzner, told the Kerry committee that he
made his first flight into Ilopango in May 1983, ferrying M-79 grenade launchers and anti-ship mines from
Boca-Chica Naval Air Station in Florida to San Salvador.

Then, he said, he flew to Colombia, loaded marijuana and headed north
again. Betzner testified that he worked for Colombian narco-trafficker George

By 1984, Morales was under indictment. According to his own testimony,
he soon struck a deal with the Contras.

Morales told the Kerry committee that he delivered a plane to two
lieutenants of Eden Pastora — commander of a Contra force operating
along the Costa Rican border. The lieutenants were Octaviano Cesar and
Marco Aguado.

The Contra leaders allegedly told him that they worked for the CIA.

”They wanted airplanes. They wanted money. They wanted boats,” he
testified. For his part, Morales  said, he wanted help in beating his marijuana-
smuggling indictment and in importing drugs.

Cesar denied any personal involvement in drug trafficking, but told
the Kerry committee that he had informed his CIA handler at Ilopango of the general arrangement with

He said the agent replied, more or less, ”All right, so long as you
don’t deal in the powder.”

CIA Inspector General Frederick P. Hitz has launched a new review of
agents’ handling of drug matters. But Hitz recently told the Senate Intelligence Committee that a 1988
internal investigation concluded, ”Any allegations implying that the CIA condoned, abetted or participated in narcotics trafficking are
completely false.”

Morales, however, said he was so convinced that the government was
protecting him that he ordered pilots to land loads of cocaine at major
U.S. airports in broad daylight.

Morales said he was prosecuted only in 1986, after he hired a DEA

Pastora last week conceded that smugglers took advantage of the
Contras’ facilities and of the anti-communist sentiment dominating U.S. policy in Central America.

”They undoubtedly used it for drug trafficking — they fooled
people,” Pastora said.

Gates said allegations of drug running may have contributed to the
CIA’s decision to cut off aid to
Pastora in 1984. The former ”Commander Zero,” however, testified that
he lost CIA aid because he wouldn’t cooperate with other Contra groups.

Colombian trafficker Fabiano Carrasco testified at a 1990 trial that
between 1983 and 1986 he flew in at least a ton of cocaine for Morales, thinking that the CIA protected
the shipments.

Five witnesses told the Kerry committee that cocaine shipments
sometimes originated at the Costa Rican ranch of a CIA operative named John Hull. Hull has denied any
connection to drug smuggling.

On Oct. 10, 1984, Congress approved the Boland Amendment, which banned
intelligence agencies from ”supporting, directly or indirectly, military or paramilitary
operations in Nicaragua.” At the White House, National Security Council aide North quickly
assembled a team, ostensibly with private funds, to supply the Contras.

Smuggling allegations soon arose. An April 1, 1985, note to North from
Contra liaison Rob Owen said a Contra pilot was ”now involved in drug running out of Panama.”

A July 1985 entry in North’s diary concerning the Contras’ plans to
buy arms from a Honduran arms
warehouse reads, ”14 M to finance came from drugs.”

An Aug. 9, 1985, diary entry reads, ”Honduran DC-6 which is being
used for runs out of New Orleans
is probably being used for drug runs into U.S.”

North says he passed the information to law-enforcement authorities.
Iran-Contra special prosecutor Lawrence Walsh, however, said there was
”never any evidence that Oliver North referred this information to anyone else.”

In October 1985, Castillo, a decorated Vietnam combat veteran with
almost seven years of experience at the DEA, took a new post in the agency’s Guatemala City office.

He said his new boss, Robert J. Stia, soon told him about nearby
Ilopango. ”Don’t interfere in their operation,” he quoted Stia as saying.

Stia could not be reached for comment.

Castillo said a DEA colleague soon cabled him to ”check out hangars
four and five” at the airport. The CIA and North’s operation controlled
those hangars, according to Castillo.

Castillo said he soon developed a network of informants. One routinely
talked to pilots and often looked inside their planes. Another knew the Salvadoran military leaders
who managed the airfield. A third socialized with many of the pilots.

One informant told the Dallas Morning News that he saw drug shipments
passing through Ilopango about twice a month and passed details to

He said some of the flights involved pilots in the Contra network.
Others involved pilots who apparently just used Ilopango — which had both a civilian and a military side —
as a landing base.

Castillo said he checked pilot names against his agency’s database of
suspected traffickers and found more than a dozen matches. He said he couldn’t understand how they
continued to use Ilopango because the CIA and National Security Council had access to the same DEA

The CIA has said it constantly screened its Contra operatives for drug
connections, ”and any person or entity found to be involved in such activity must be separated from the

By 1986, however, the Boland Amendment had ended CIA control of the
Contra supply mission. The White House ensured that its resupply
operation fell outside the legal controls imposed on the CIA, Gates

One of Castillo’s prime targets was Walter L. Grasheim. Officially,
Grasheim was in El Salvador to sell night-vision equipment to the local

But the American businessman had U.S. Embassy credentials, had
accompanied the Contras on a raid in the early 1980s and said he had been host to Contra resupply leaders
at his home.

Grasheim sometimes said his CIA ties were so good that he didn’t even
need to file flight plans, Castillo’s informants said.

One informant reported seeing packages ”wrapped like cocaine” in
Grasheim’s aircraft. He thought that Grasheim repeatedly flew narcotics to Florida and returned with military supplies.

In September 1986, Salvadoran narcotics officers burst into Grasheim’s home. They allegedly found a pound of marijuana and a small arsenal: M-16 rifles, grenade launchers, crates of ammunition and plastic explosives and at least one shoulder-fired rocket.

”The boxes were stacked to the ceiling,” recalled one of Castillo’s
informants, who participated in the Salvadoran officials filed no charges.

Local officials ”were convinced we’d hit a Contras weapons lode,”
said one of Castillo’s informants. ”Nobody wanted to touch this thing with a 10-foot pole.”

Grasheim could not be reached for comment. He told Iran-Contra
investigators that he had committed no crimes and had kept only ”a few automatic weapons” in his home.

Castillo and embassy officials alike recall that after the Grasheim
raid, he was ordered to shelve the Ilopango investigation.

On Oct. 5, 1986, Nicaragua shot down a plane carrying weapons. The
Sandinistas captured U.S.
operative Eugene Hasenfus, who said he was working on a secret operation
out of Ilopango.

North was fired, and many Reagan administration officials were later
convicted of lying to Congress about the Iran-Contra affair or obstructing justice. President Bush
later pardoned six upper-level officials, and North’s conviction was overturned on a technicality.

As the Iran-Contra investigation grew, Castillo said, he expected word
of drug smuggling to break any day.

He said he had regularly filed reports to Washington throughout 1986.
But, he added, only after leaks to the press in early 1987 did DEA headquarters respond.

Two young analysts made a brief visit. They seemed bent on disproving
the allegations, according to Castillo and his informants. Said one of the sources: ”They treated me
like I was a piece of dirt.”

Yet, Castillo said, as the Kerry committee deepened its smuggling
investigation, the DEA’s Washington office told him that the Ilopango probe was still considered ”open.”

Senate investigator Mattes said the Department of Justice, DEA’s
parent agency, often refused the committee access to information on pending cases.

DEA investigators later focused on alleged wrongdoings by Castillo. He
called that an Ilopango ”backlash.”

In July 1988, Stia called him ”a dedicated DEA employee … who had
received overall performance ratings of excellent or above for the last three rating periods.”

By 1991, however, Castillo was threatened with a 35-day suspension on
a range of administrative complaints. He chose instead to take the disability pension.

”I decided I had to write my story,” Castillo said recently. ”Now
I’ve become part of a bigger fight.”

(University of Maryland associate professor of history John Newman and
free-lance reporter Berta R. Thayer in Panama contributed to this

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