Office of the Inspector General
Department of Justice


USDOJ/OIG Special Report

 


THE CIA-CONTRA-CRACK COCAINE CONTROVERSY:
A REVIEW OF THE JUSTICE DEPARTMENT’S
INVESTIGATIONS AND PROSECUTIONS
(December, 1997)

 

Epilogue
(July, 1998)

 

I. Introduction

On December 17, 1997, I signed our completed report entitled, The CIA-Contra-Crack Cocaine Controversy: A Review of the Justice Department's Investigations and Prosecutions. This 407-page report was the culmination of a comprehensive 15-month investigation by the Office of Inspector General (OIG) into allegations first raised in the San Jose Mercury News that U.S. government officials -- including Central Intelligence Agency (CIA) and Department of Justice (DOJ) employees -- either ignored or protected drug dealers in Southern California who were associated with the Nicaraguan Contras. We originally planned to publicly release the report the following day, December 18, 1997.

However, the Attorney General, citing law enforcement concerns, invoked Section 8E of the Inspector General Act to defer the release of our report. This was the first time that publication of one of our reports has been prevented in this manner. Given the extraordinary nature of the Attorney General's action and the significant interest in why our report was not released in December 1997, we believe it necessary to describe the sequence of events that resulted in the Attorney General's decision not to permit the report to be publicly disclosed until now.

The report we are releasing today is the same report that we completed on December 17 and planned to release on December 18. It has not been changed in any way.

II. The OIG Investigation and the Delay in Issuing the Report

One of the chief figures in the Mercury News articles was Oscar Danilo Blandon, a Nicaraguan who fled to the United States soon after the Sandinistas came to power. The articles reported that he was one of the biggest drug traffickers in Southern California, supplying Ricky Ross, a major cocaine dealer in Los Angeles, and others in California and elsewhere.

Shortly after his arrest on federal drug charges in May 1992, Blandon began cooperating with the government. After his guilty plea to a charge of conspiracy to possess cocaine with the intent to distribute, federal prosecutors filed a motion for a reduced sentence based on his substantial assistance to the government. He was sentenced to 48 months in prison. Blandon continued to cooperate with the government after his sentencing. In September 1994, prosecutors filed another motion seeking a further reduction in his sentence, and the judge resentenced him to "time served" -- 28 months -- based on his continued cooperation.

One of the primary issues raised in the Mercury News series was why Blandon received such lenient treatment from the government. The articles and the public discussion that ensued also focused on the disparity between Blandon's sentence and the prison sentence of life without parole received by Ross upon his conviction on federal drug charges in 1996 -- a case developed by Blandon acting on behalf of the DEA. The articles suggested that the difference between the treatment of Blandon and Ross might be attributable to Blandon's alleged ties to the CIA or the Contras.

Among other issues, the OIG investigation thoroughly examined Blandon's case and the treatment he received. We did not find that he had any ties to the CIA, that the CIA intervened in his case in any way, or that any connections to the Contras affected his treatment. We explored the facts surrounding Blandon's sentence reductions and found through our interviews of DEA and federal prosecutors that his reductions in sentence were based on his substantial cooperation with prosecutors and investigators, not ties to the Contras or the CIA. We made no attempt independently to measure the value of Blandon's cooperation; instead we sought to determine whether his cooperation was the reason for his lenient treatment.

To gather this information, we interviewed Blandon in February 1997 (with the DEA's knowledge), DEA agents who worked with him, and federal prosecutors in San Diego who handled his case. Through these efforts, we learned the extent of Blandon's cooperation and that he continued to cooperate with the DEA after he was released from prison in September 1994. We also learned that after the Mercury News articles focused attention on Blandon and his activities in late 1996, the DEA stopped using him as an informant.

Our investigation, which began in October 1996, was nearing completion of the investigatory phase in the summer of 1997. In August 1997 we were told by the DEA that it was considering reactivating Blandon and using him as an informant in a criminal investigation. We were asked by the DEA whether we had found any reason to believe that Blandon had perjured himself in interviews with us or in his testimony in a closed session of the Senate Select Committee on Intelligence in October 1996. We replied that we had no such evidence.

In November 1997, we provided a draft of our report to the DEA, the DOJ Criminal Division, and the United States Attorney's Office for the Southern District of California (USAO). We asked them to review the document and provide us any comments regarding the report or disclosure of informant or other law enforcement information. We requested these comments by December 5 because we intended to release the report in mid-December.

On December 8, 1997, we learned for the very first time that the DEA, the Criminal Division, and the USAO objected to our release of information about Blandon's past cooperation with the DEA. We learned that Blandon had been reactivated as an informant in September 1997 to assist with an investigation of international drug dealers. According to the DEA, in order to protect his credibility in the face of the publicity generated by the Mercury News articles, Blandon had told the drug dealers that he had cooperated with the U.S. government in the case against Ricky Ross but had not cooperated against anyone else. As disclosed in our report, Blandon provided assistance to the government in investigations of many drug traffickers other than Ross.

Over the course of the next several weeks in December 1997 and January 1998, the OIG was involved in extensive discussions with the DEA, the Criminal Division, the USAO, and the Deputy Attorney General's Office regarding the release of our report. The DEA, the Criminal Division, and the USAO argued that release of the report would significantly increase the personal risk to Blandon and the viability of the DEA's investigation. We pointed out that the details regarding much of Blandon's extensive cooperation against people other than Ross was already part of the public record and that using Blandon under these circumstances would put his safety in jeopardy regardless of the publication of the report. We also argued that the report dealt with a matter of substantial public interest, and we expressed our concern that preventing release of the report would simply add fuel to the allegation that the Department was involved in a cover-up.

Based upon the representations of the DEA, the Criminal Division, and the USAO of the importance of the criminal investigation, Blandon's role in that investigation, and safety issues with respect to Blandon, the Deputy Attorney General decided to recommend that release of our report be deferred while the DEA pursued its drug investigation. On January 23, 1998, the Attorney General issued a letter invoking her authority under the Inspector General Act to delay public release of our report based on those same representations.

On July 14, 1998, the Attorney General wrote us a letter stating "the law enforcement concerns that caused me to make my determination no longer warrant deferral of the public release of your report." Her letter stated that we could therefore release the report. We are doing so now, with no changes from the original.

III. Conclusion

We believe that the decision to reactivate Blandon as an informant was undertaken without adequate notice or consultation about its impact on our ability to discuss in the report the critical issue of Blandon's past cooperation with the government. This was an important part of our investigation and report.

The Attorney General's decision to block the release of our report gave rise to groundless speculation that the Department was trying to suppress findings and conclusions contained in our report that may have been damaging to the Department or may have supported the original allegations. That was never an issue. Rather, the Attorney General's decision was based on an assessment of the importance of the criminal investigation, Blandon's role in that investigation, and safety issues with respect to Blandon versus the benefit of timely release of a report that addressed a topic of significant public concern.

 

July 22, 1998

 

Michael R. Bromwich
Inspector General

 

#####


THE CIA-CONTRA-CRACK COCAINE CONTROVERSY:
A REVIEW OF THE JUSTICE DEPARTMENTíS INVESTIGATIONS AND PROSECUTIONS
(December, 1997)
Office of the Inspector General
Department of Justice