By Gary WEBB, Mercury News Staff Writer
- Colombia-San Francisco Bay Area drug pipeline helped finance CIA-backed Contras
- Published: Aug. 18, 1996
FOR THE BETTER PART of a decade, a San Francisco Bay Area drug ring sold tons
of cocaine to the Crips and Bloods street gangs of Los Angeles and funneled
millions in drug profits to a Latin American guerrilla army run by the U.S.
Central Intelligence Agency, a Mercury News investigation has found.
This drug network opened the first pipeline between Colombia's cocaine cartels
and the black neighborhoods of Los Angeles, a city now known as the "crack''
capital of the world. The cocaine that flooded in helped spark a crack
explosion in urban America and provided the cash and connections needed for
L.A.'s gangs to buy automatic weapons.
It is one of the most bizarre alliances in modern history: the union of a
U.S.-backed army attempting to overthrow a revolutionary socialist government
and the Uzi-toting "gangstas'' of Compton and South-Central Los Angeles.
The army's financiers -- who met with CIA agents both before and during the
time they were selling the drugs in L.A. -- delivered cut-rate cocaine to the
gangs through a young South-Central crack dealer named Ricky Donnell Ross.
Unaware of his suppliers' military and political connections, "Freeway
Rick" -- a dope dealer of mythic proportions in the L.A. drug world -- turned
the cocaine powder into crack and wholesaled it to gangs across the country.
The cash Ross paid for the cocaine, court records show, was then used to buy
weapons and equipment for a guerrilla army named the Fuerza Democratica
Nicaraguense (Nicaraguan Democratic Force) or FDN, the largest of several
anti-communist commonly called the Contras.
While the FDN's war is barely a memory today, black America is still dealing
with its poisonous side effects. Urban neighborhoods are grappling with legions
of homeless crack addicts. Thousands of young black men are serving long prison
sentences for selling cocaine -- a drug that was virtually unobtainable in
black neighborhoods before members of the CIA's army started bringing it into
South-Central in the 1980s at bargain-basement prices.
And the L.A. gangs, which used their enormous cocaine profits to arm themselves
and spread crack across the country, are still thriving, turning entire blocks
of major cities into occasional war zones. "There is a saying that the ends
justify the means,'' former FDN leader and drug dealer Oscar Danilo Blandon
Reyes testified during a recent cocaine trafficking trial in San Diego. "And
that's what Mr. Bermudez (the CIA agent who commanded the FDN) told us in
Honduras, OK? So we started raising money for the Contra revolution.''
Recently declassified reports, federal court testimony, undercover tapes, court
records here and abroad and hundreds of hours of interviews over the past 12
months leave no doubt that Blandon was no ordinary drug dealer.
Shortly before Blandon -- who had been the drug ring's Southern California
distributor -- took the stand in San Diego as a witness for the U.S. Department
of Justice, federal prosecutors obtained a court order preventing defense
lawyers from delving into his ties to the CIA.
Blandon, one of the FDN's founders in California, "will admit that he was a
large-scale dealer in cocaine, and there is no additional benefit to any
defendant to inquire as to the Central Intelligence Agency,'' Assistant U.S.
Attorney L.J. O'Neale argued in his motion shortly before Ross' trial on
cocaine trafficking charges in March. The most Blandon would say in court
about who called the shots when he sold cocaine for the FDN was that "we
received orders from the -- from other people.''
The 5,000-man FDN, records show, was created in mid-1981 when the CIA combined
several existing groups of anti-communist exiles into a unified force it hoped
would topple the new socialist government of Nicaragua.
From 1982 to 1988, the FDN -- run by both American and Nicaraguan CIA agents --
waged a losing war against Nicaragua's Sandinista government, the
Cuban-supported socialists who'd overthrown U.S.-backed dictator Anastasio
Somoza in 1979. Blandon, who began working for the FDN's drug operation in late
1981, testified that the drug ring sold almost a ton of cocaine in the United
States that year -- $54 million worth at prevailing wholesale prices. It was
not clear how much of the money found its way back to the CIA's army, but
Blandon testified that "whatever we were running in L.A., the profit was going
to the Contra revolution.'' At the time of that testimony, Blandon was a
full-time informant for the Drug Enforcement Administration, a job the U.S.
Department of Justice got him after releasing him from prison in 1994.
Though Blandon admitted to crimes that have sent others away for life, the
Justice Department turned him loose on unsupervised probation after only 28
months behind bars and has paid him more than $166,000 since, court records
show. "He has been extraordinarily helpful,'' federal prosecutor O'Neale told
Blandon's judge in a plea for the trafficker's release in 1994. Though O'Neale
once described Blandon to a grand jury as "the biggest Nicaraguan cocaine
dealer in the United States,'' the prosecutor would not discuss him with the
Blandon's boss in the FDN's cocaine operation, Juan Norwin Meneses Cantarero,
has never spent a day in a U.S. prison, even though the federal government has
been aware of his cocaine dealings since at least 1974, records show.
Meneses -- who ran the drug ring from his homes in the San Francisco Bay Area
-- is listed in the DEA's computers as a major international drug smuggler and
was implicated in 45 separate federal investigations. Yet he and his
cocaine-dealing relatives lived quite openly in the Bay Area for years, buying
homes in Pacifica and Burlingame, along with bars, restaurants, car lots and
factories in San Francisco, Hayward and Oakland. "I even drove my own cars,
registered in my name,'' Meneses said during a recent interview in Nicaragua.
Meneses' organization was "the target of unsuccessful investigative attempts
for many years,'' prosecutor O'Neale acknowledged in a 1994 affidavit. But
records and interviews revealed that a number of those probes were stymied not
by the elusive Meneses but by agencies of the U.S. government.
Agents from four organizations -- the DEA, U.S. Customs, the Los Angeles County
Sheriff's Department and the California Bureau of Narcotic Enforcement -- have
complained that investigations were hampered by the CIA or unnamed "national
One 1988 investigation by a U.S. Senate subcommittee ran into a wall of
official secrecy at the Justice Department. In that case, congressional records
show, Senate investigators were trying to determine why the U.S. attorney in
San Francisco, Joseph Russoniello, had given $36,000 back to a Nicaraguan
cocaine dealer arrested by the FBI.
The money was returned, court records show, after two Contra leaders sent
letters to the court swearing that the drug dealer had been given the cash to
buy weapons for guerrillas. Russoniello said it was cheaper to give the money
back than to disprove that claim.
"The Justice Department flipped out to prevent us from getting access to
people, records -- finding anything out about it,'' recalled Jack Blum, former
chief counsel to the Senate subcommittee that investigated allegations of
Contra cocaine trafficking. "It was one of the most frustrating exercises that
I can ever recall.''
It wasn't until 1989, a few months after the Contra-Sandinista war ended and
five years after Meneses moved from the Peninsula to a ranch in Costa Rica,
that the U.S. government took action against him -- sort of.
Federal prosecutors in San Francisco charged Meneses with conspiracy to
distribute one kilo of cocaine in 1984, a year in which he was working publicly
with the FDN.
Meneses' work was so public, in fact, that he posed for a picture in June 1984
in a kitchen of a San Francisco home with the FDN's political boss, Adolfo
Calero, a longtime CIA operative who became the public face of the Contras in
the United States.
According to the indictment, Meneses was in the midst of his alleged cocaine
conspiracy at the time the picture was taken.
But the indictment was quickly locked away in the vaults of the San Francisco
federal courthouse, where it remains today inexplicably secret for more than
seven years. Meneses was never arrested.
Reporters found a copy of the secret indictment in Nicaragua, along with a
federal arrest warrant issued Feb. 8, 1989. Records show the no-bail warrant
was never entered into the national law enforcement database called NCIC, which
police use to track down fugitives. The former federal prosecutor who indicted
him, Eric Swenson, declined to be interviewed.
After Nicaraguan police arrested Meneses on cocaine charges in Managua in 1991,
his judge expressed astonishment that the infamous smuggler went unmolested by
American drug agents during his years in the United States.
"How do you explain the fact that Norwin Meneses, implicated since 1974 in the
trafficking of drugs ... has not been detained in the United States, a country
in which he has lived, entered and departed many times since 1974?'' Judge
Martha Quezada asked during a pretrial hearing.
"Well, that question needs to be asked to the authorities of the United
States,'' replied Roger Mayorga, then chief of Nicaragua's anti-drug agency.
His seeming invulnerability amazed American authorities as well.
A Customs agent who investigated Meneses in 1980 before transferring elsewhere
said he was reassigned to San Francisco seven years later "and I was sitting in
some meetings and here's Meneses' name again. And I can remember thinking,
"Holy cow, is this guy still around?'.''
Blandon led an equally charmed life. For at least five years he brokered
massive amounts of cocaine to the black gangs of Los Angeles without being
arrested. But his luck changed overnight.
On Oct. 27, 1986, agents from the FBI, the IRS, local police and the Los
Angeles County sheriff fanned out across Southern California and raided more
than a dozen locations connected to Blandon's cocaine operation. Blandon and
his wife, along with numerous Nicaraguan associates, were arrested on drug and
The search warrant affidavit reveals that local drug agents knew plenty about
Blandon's involvement with cocaine and the CIA's army nearly 10 years ago.
"Danilo Blandon is in charge of a sophisticated cocaine smuggling and
distribution organization operating in Southern California,'' L.A. County
sheriff's Sgt. Tom Gordon said in the 1986 affidavit. "The monies gained from
the sales of cocaine are transported to Florida and laundered through Orlando
Murillo, who is a high-ranking officer of a chain of banks in Florida named
Government Securities Corporation. From this bank the monies are filtered to
the Contra rebels to buy arms in the war in Nicaragua.''
Corporate records show that Murillo -- a Nicaraguan banker and relative of
Blandon's wife -- was a vice-president of Government Securities Corporation in
Coral Gables, a large brokerage firm that collapsed in 1987 amid allegations of
fraud. Murillo did not respond to an interview request. Despite their intimate
knowledge of Blandon's operations, the police raids were a spectacular failure.
Every location had been cleaned of anything remotely incriminating. No one was
Ron Spear, a spokesman for Los Angeles County Sheriff Sherman Block, said
Blandon somehow knew that he was under police surveillance. Others thought so,
"The cops always believed that investigation had been compromised by the CIA,''
Los Angeles federal public defender Barbara O'Connor said in a recent
interview. O'Connor knew of the raids because she later defended the raids'
leader, Sgt. Gordon, against federal charges of police corruption. Gordon,
convicted of tax evasion, declined to be interviewed.
FBI records show that soon after the raids, Blandon's defense attorney, Bradley
Brunon, called the sheriff's department to suggest that his client's troubles
stemmed from a most unlikely source: a recent congressional vote authorizing
$100 million in military aid to the CIA's Contra army. According to a December
1986 FBI Teletype, Brunon told the officers that the "CIA winked at this sort
of thing. ...(Brunon) indicated that now that U.S. Congress had voted funds for
the Nicaraguan Contra movement, U.S. government now appears to be turning
against organizations like this.''
That FBI report, part of the files of former Iran-Contra Special Prosecutor
Lawrence Walsh, was made public only last year, when it was released by the
National Archives at the Mercury News' request.
Blandon has also implied that his cocaine sales were, for a time, CIA-approved.
He told a San Francisco federal grand jury in 1994 that once the FDN began
receiving American taxpayer dollars, the CIA no longer needed his kind of
"When Mr. Reagan get in the power, we start receiving a lot of money,'' Blandon
testified. "And the people that was in charge, it was the CIA, so they didn't
want to raise any (drug) money because they have, they had the money that they
"From the government?" asked Assistant U.S. Attorney David Hall.
"Yes," for the Contra revolution," Blandon said. "So we started -- you know,
the ambitious person -- we started doing business by ourselves."
Asked about that, prosecutor Hall said, "I don't know what to tell you. The CIA
won't tell me anything."
None of the government agencies known to have been involved with Meneses and
Blandon over the years would provide the Mercury News with any information
A Freedom of Information Act request filed with the CIA was denied on national
security grounds. FOIA requests filed with the DEA were denied on privacy
grounds. Requests filed months ago with the FBI, the State Department and the
Immigration and Naturalization Service have produced nothing so far.
None of the DEA officials known to have worked with the two men would talk to a
reporter. Questions submitted to the DEA's public affairs office in Washington
were never answered, despite repeated requests.
Blandon's lawyer, Brunon, said in an interview that his client never told him
directly that he was selling cocaine for the CIA, but the prominent Los Angeles
defense attorney drew his own conclusions from the "atmosphere of CIA and
clandestine activities'' that surrounded Blandon and his Nicaraguan friends.
"Was he involved with the CIA? Probably. Was he involved with drugs? Most
definitely,'' Brunon said. "Were those two things involved with each other?
They've never said that, obviously. They've never admitted that. But I don't
know where these guys get these big aircraft ...''
That very topic arose during the sensational 1992 cocaine trafficking trial of
Meneses after Meneses was arrested in Nicaragua in connection with a staggering
750-kilo shipment of cocaine. His chief accuser was his friend Enrique Miranda,
a relative and former Nicaraguan military intelligence officer who had been
Meneses' emissary to the cocaine cartel of Bogota, Colombia. Miranda pleaded
guilty to drug charges and agreed to cooperate in exchange for a seven-year
In a long, handwritten statement he read to Meneses' jury, Miranda revealed the
deepest secrets of the Meneses drug ring, earning his old boss a 30-year prison
sentence in the process.
"He (Norwin) and his brother Luis Enrique had financed the Contra revolution
with the benefits of the cocaine they sold,'' Miranda wrote. "This operation,
as Norwin told me, was executed with the collaboration of high-ranking
Salvadoran military personnel. They met with officials of the Salvadoran air
force, who flew (planes) to Colombia and then left for the U.S., bound for an
Air Force base in Texas, as he told me.''
Meneses -- who has close personal and business ties to a Salvadoran air force
commander and former CIA agent named Marcos Aguado -- declined to discuss
Miranda's statements during an interview at a prison outside Managua in
January. He is scheduled to be paroled this summer, after nearly five years in
U.S. General Accounting Office records confirm that El Salvador's air force was
supplying the CIA's Nicaraguan guerrillas with aircraft and flight support
services throughout the mid-1980s.
Miranda did not name the Air Force base in Texas where the FDN's cocaine was
purportedly flown. The same day the Mercury News requested official permission
to interview Miranda, he disappeared.
While out on a routine weekend furlough, Miranda failed to return to the
Nicaraguan jail where he'd been living since 1992. Though his jailers, who
described him as a model prisoner, claimed Miranda had escaped, they didn't
call the police until a Mercury News correspondent showed up and discovered he
was gone. He has not been seen in nearly a year.
Role of CIA-linked agents a well-protected secret until now
Published: Aug. 19,1996
IF THEY'D BEEN IN a more respectable line of work, Norwin Meneses, Danilo
Blandon and ''Freeway Rick'' Ross would have been hailed as geniuses of
This odd trio -- a smuggler, a bureaucrat and a driven ghetto teen-ager -- made
fortunes creating the first mass market in America for a product so hellishly
desirable that consumers will literally kill to get it: ''crack'' cocaine.
Federal lawmen will tell you plenty about Rick Ross, mostly about the evils he
visited upon black neighborhoods by spreading the crack plague in Los Angeles
and cities as far east as Cincinnati. On Aug. 23, they hope, Freeway Rick will
be sentenced to life in prison without the possibility of parole.
But those same officials won't say a word about the two men who turned Rick
Ross into L.A's first king of crack, the men who, for at least five years,
supplied him with enough Colombian cocaine to help spawn crack markets in major
cities nationwide. Their critical role in the country's crack explosion, a
Mercury News investigation found, has been a strictly guarded secret -- until
To understand how crack came to curse black America, you have to go into the
volcanic hills overlooking Managua, the capital of the Republic of Nicaragua.
During June 1979, those hills teemed with triumphant guerrillas called
Sandinistas -- Cuban- assisted revolutionaries who had just pulled off one of
the biggest military upsets in Central American history. In a bloody civil war,
they'd destroyed the U.S.-trained army of Nicaragua's dictator, Anastasio
Somoza. The final assault on Somoza's downtown bunker was expected any day.
In the dictator's doomed capital, a minor member of Somoza's government decided
to skip the war's obvious ending. On June 19, Oscar Danilo Blandon Reyes
gathered his wife and young daughter, slipped through the encircling rebels and
flew into exile in California.
Blandon, the then 29-year-old son of a wealthy slumlord, left a life of
privilege and luxury behind. Educated at the finest private schools in Latin
America, he had earned a master's degree in marketing and had become the head
of a $27 million program financed by the U.S. government. As Nicaragua's
director of wholesale markets, it had been his job to create an American-style
agricultural system. Today, Danilo Blandon is a well-paid and highly trusted
operative for the U.S. Drug Enforcement Administration. Federal officials say
he is one of the DEA's top informants in Latin America, collecting intelligence
on Colombian and Mexican drug lords and setting up stings.
In March, he was the DEA's star witness at a drug trial in San Diego, where,
for the first time, he testified publicly about his strange interlude between
government jobs -- the years he sold cocaine to the street gangs of black Los
A stocky man with salt-and-pepper hair, a trim mustache and a distinguished
bearing, Blandon swore that he didn't plan on becoming a dope dealer when he
landed in the United States with $100 in his pocket, seeking political asylum.
He did it, he insisted, out of patriotism.
When duty called in late 1981, he was working as a car salesman in East Los
Angeles. In his spare time, he said, he and a few fellow exiles were working to
rebuild Somoza's defeated army, the Nicaraguan national guard, in hopes of one
day returning to Managua in triumph.
Like his friends, Blandon nursed a keen hatred of the Sandinistas, who had
confiscated the Blandon family's cattle ranches and sprawling urban slums. His
wife's politically prominent family -- the Murillos, whose patriarch was
Managua's mayor in the 1960s -- lost its immense fortune as well. ''Because of
the horror stories and persecution suffered by his family and countrymen,
Blandon said he decided to assist his countrymen in fighting the tyranny of the
(Sandinista) regime,'' stated a 1992 report from the U.S. Probation and Parole
Department. ''He decided that because he was an adept businessman, he could
assist his countrymen through monetary means.''
But the rallies and cocktail parties the exiles hosted raised little money.
''At this point, he became committed to raising money for humanitarian and
political reasons via illegal activity (cocaine trafficking for profit),'' said
the heavily censored report, which surfaced during the March trial. That
venture began, Blandon testified, with a phone call from a wealthy friend in
Miami named Donald Barrios, an old college classmate. Corporate records show
Barrios was a business partner of one of the ex-dictator's top military aides:
Maj. Gen. Gustavo ''The Tiger'' Medina, a steely eyed counterinsurgency expert
and the former supply boss of Somoza's army.
Blandon said his college chum, who also was working in the resistance movement,
dispatched him to Los Angeles International Airport to pick up another exile,
Juan Norwin Meneses Cantarero. Though their families were related, Blandon
said, he'd never met Meneses -- a wiry, excitable man with a bad toupee --
until that day.
''I picked him up, and he started telling me that we had to (raise) some money
and to send to Honduras,'' Blandon testified. He said he flew with Meneses to a
camp there and met one of his new companion's old friends, Col. Enrique
Bermudez. Bermudez -- who'd been Somoza's Washington liaison to the American
military -- was hired by the Central Intelligence Agency in mid-1980 to pull
together the remnants of Somoza's vanquished national guard, records show. In
August 1981, Bermudez's efforts were unveiled at a news conference as the
Fuerza Democratica Nicaraguense (FDN) -- in English, the Nicaraguan Democratic
Force. It was the largest and best-organized of the handful of guerrilla groups
Americans would know as the Contras.
Bermudez was the FDN's military chief and, according to congressional records
and newspaper reports, received regular CIA paychecks for a decade, payments
that stopped shortly before his still-unsolved slaying in Managua in 1991.
White House records show that shortly before Blandon's meeting with Bermudez,
President Reagan had given the CIA the green light to begin covert paramilitary
operations against the Sandinista government. But Reagan's secret Dec. 1, 1981,
order permitted the spy agency to spend only $19.9 million on the project, an
amount CIA officials acknowledged was not nearly enough to field a credible
After meeting with Bermudez, Blandon testified, he and Meneses ''started
raising money for the Contra revolution.'' ''There is a saying that the ends
justify the means,'' Blandon testified. ''And that's what Mr. Bermudez told us
in Honduras, OK?''
While Blandon says Bermudez didn't know cocaine would be the fund-raising
device they used, the presence of the mysterious Mr. Meneses strongly suggests
Norwin Meneses, known in Nicaraguan newspapers as ''Rey de la Droga'' (King of
Drugs), was then under active investigation by the DEA and the FBI for
smuggling cocaine into the United States, records show.
And Bermudez was very familiar with the influential Meneses family. He had
served under two Meneses brothers, Fermin and Edmundo, who were generals in
Somoza's army. Somoza himself spoke at the 1978 funeral of Edmundo Meneses, who
was slain by leftists shortly after his appointment as Nicaragua's ambassador
to Guatemala, hailing him as an anti-communist martyr.
A violent death -- someone else's -- had also made brother Norwin famous in his
homeland. In 1977 he was accused of ordering the assassination of Nicaragua's
chief of Customs, who was gunned down in the midst of an investigation into an
international stolen car ring allegedly run by Norwin Meneses.
Though the customs boss accused Meneses on his deathbed of hiring his killer,
Nicaraguan newspapers reported that the Managua police, then commanded by
Edmundo Meneses, cleared Norwin of any involvement.
Despite that incident and a stack of law enforcement reports describing him as
a major drug trafficker, Norwin Meneses was welcomed into the United States in
July 1979 as a political refugee and given a visa and a work permit. He
settled in the San Francisco Bay Area, and for the next six years supervised
the importation of thousands of kilos of cocaine into California.
It arrived in all kinds of containers: false-bottomed shoes, Colombian
freighters, cars with hidden compartments, luggage from Miami. Once here, it
disappeared into a series of houses and nondescript storefront businesses
scattered from Hayward to San Jose, Pacifica to Burlingame, Daly City to
Oakland. And, like Blandon, Meneses went to work for the CIA's army.
At the meeting with Bermudez, Meneses said in a recent interview, the Contra
commander put him in charge of ''intelligence and security'' for the FDN in
''Nobody (from California) would join the Contra forces down there without my
knowledge and approval,'' he said proudly. Blandon, he said, was assigned to
raise money in Los Angeles.
Blandon testified that Meneses took him back to San Francisco and, over two
days, schooled him in the cocaine trade.
Meneses declined to discuss any cocaine dealings he may have had, other than to
deny that he ever ''transferred benefits from my business to the FDN. Business
Lessons over, Blandon said, Meneses gave him two kilograms of cocaine (roughly
4 pounds), the names of two customers and a one-way ticket to Los Angeles.
''Meneses was pushing me every week,'' he testified. ''It took me about three
months, four months to sell those two keys because I didn't know what to do.
... In those days, two keys was too heavy.''
At the time, cocaine was so costly that few besides rock stars and studio
executives could afford it. One study of actual cocaine prices paid by DEA
agents put it at $5,200 an ounce.
But Blandon wasn't peddling the FDN's cocaine in Beverly Hills or Malibu. To
find customers, he and several other Nicaraguan exiles working with him headed
for the vast, untapped markets of L.A.'s black ghettos.
Blandon's marketing strategy, selling the world's most expensive street drug
in some of California's poorest neighborhoods, might seem baffling, but in
retrospect, his timing was uncanny. He and his compatriots arrived in
South-Central L.A. right when street-level drug users were figuring out how to
make cocaine affordable: by changing the pricey white powder into powerful
little nuggets that could be smoked -- crack.
Crack turned the cocaine world on its head. Cocaine smokers got an explosive
high unmatched by 10 times as much snorted powder. And since only a tiny amount
was needed for that rush, cocaine no longer had to be sold in large, expensive
quantities. Anyone with $20 could get wasted. It was a ''substance that is
tailor-made to addict people,'' Dr. Robert Byck, a Yale University cocaine
expert, said during congressional testimony in 1986. ''It is as though
(McDonald's founder) Ray Kroc had invented the opium den.''
Crack's Kroc was a disillusioned 19-year-old named Ricky Donnell Ross, who, at
the dawn of the 1980s, found himself adrift on the streets of South-Central Los
A talented tennis player for Dorsey High School, Ross had recently seen his
dream of a college scholarship evaporate when his coach discovered he could
neither read nor write.
At the end of tennis season, Ross quit high school and wound up at Los Angeles
Trade-Technical College, a vocational community college where, ironically, he
learned to bind books. But a bookbinding career was the last thing Ross had in
mind. L.A. Trade-Tech had a tennis team, and Ross was still hoping his skills
with the racquet would get his dreams back on track. ''He was a very good
player,'' recalled Pete Brown, his former coach at L.A. Trade-Tech. ''I'd say
he was probably my No. 3 guy on the team at the time.''
To pay his bills, however, Ross picked up a different racket: stolen car parts.
In late 1979, he was arrested for stealing a car and had to quit the trade
while the charges were pending.
During this forced hiatus, Ross said, a friend home on Christmas break from San
Jose State University told him about the soaring popularity of a jet-set drug
called cocaine, which Ross had only vaguely heard about. In the impoverished
neighborhoods of South-Central, it was virtually non-existent. Most street
cops, in fact, had never seen any because cocaine was then a parlor drug of the
wealthy and the trendy.
Ross' friend -- a college football player -- told him ''cocaine was going to be
the new thing, that everybody was doing it.'' Intrigued, Ross set off to find
Through a cocaine-using auto upholstery teacher Ross knew, he met a Nicaraguan
named Henry Corrales, who began selling Ross and his best friend, Ollie ''Big
Loc'' Newell, small amounts of remarkably inexpensive cocaine.
Thanks to a network of friends in South-Central and Compton, including many
members of various Crips gangs, Ross and Newell steadily built up clientele.
With each sale, Ross reinvested his hefty profits in more cocaine.
Eventually, Corrales introduced Ross and Newell to his supplier, Danilo
Blandon. And then business really picked up.
''At first, we was just going to do it until we made $5,000,'' Ross said. ''We
made that so fast we said, no, we'll quit when we make $20,000. Then we was
going to quit when we saved enough to buy a house...''
Ross would eventually own millions of dollars' worth of real estate across
Southern California, including houses, motels, a theater and several other
businesses. (His nickname, ''Freeway Rick,'' came from the fact that he owned
properties near the Harbor Freeway in Los Angeles.)
Within a year, Ross' drug operation grew to dominate inner-city Los Angeles,
and many of the biggest dealers in town were his customers. When crack hit
L.A.'s streets hard in late 1983, Ross already had the infrastructure in place
to corner a huge chunk of the burgeoning market.
It was not uncommon, he said, to move $2 million or $3 million worth of crack
in one day.
''Our biggest problem had got to be counting the money,'' Ross said. ''We got
to the point where it was like, man, we don't want to count no more money.''
Nicaraguan cocaine dealer Jacinto Torres, another former supplier of Ross and
a sometime- partner of Blandon, told drug agents in a 1992 interview that
after a slow start, ''Blandon's cocaine business dramatically increased. ...
Norwin Meneses, Blandon's supplier as of 1983 and 1984, routinely flew
quantities of 200 to 400 kilograms from Miami to the West Coast.''
Leroy ''Chico'' Brown, an ex-crack dealer from Compton who dealt with Ross,
told the Mercury News of visiting one of Ross' five cookhouses, where Blandon's
powder was turned into crack, and finding huge steel vats of cocaine bubbling
atop restaurant-size gas ranges. ''They were stirring these big pots with those
things you use in canoes,'' Brown said with amazement. ''You know -- oars.''
Blandon told the DEA last year that he was selling Ross up to 100 kilos of
cocaine a week, which was then ''rocked up'' and distributed ''to the major
gangs in the area, specifically the "Crips' and the "Bloods,''' the DEA report
At wholesale prices, that's roughly $65 million to $130 million worth of
cocaine every year, depending on the going price of a kilo.
"He was one of the main distributors down here," said former Los Angeles Police
Department narcotics detective Steve Polak, who was part of the Freeway Rick
Task Force, which was set up in 1987 to put Ross out of business. "And his
poison, there's no telling how many tens of thousands of people he
touched. He's responsible for a major cancer that still hasn't stopped
But Ross is the first to admit that being in the right place at the right
time had almost nothing to do with his amazing success. Other L.A. dealers, he
noted, were selling crack long before he started. What he had, and they
didn't, was Danilo Blandon, a friend with a seemingly inexhaustible supply of
high-grade cocaine and an expert's knowledge of how to market it.
''I'm not saying I wouldn't have been a dope dealer without Danilo,'' Ross
stressed. ''But I wouldn't have been Freeway Rick.''
The secret to his success, Ross said, was Blandon's cocaine prices. ''It was
unreal. We were just wiping out everybody.''
That alone, Ross said, allowed him to sew up the Los Angeles market and move
on. In city after city, local dealers either bought from Ross or got left
''It didn't make no difference to Rick what anyone else was selling it for.
Rick would just go in and undercut him $10,000 a key,'' Chico Brown said. ''Say
some dude was selling for 30. Boom -- Rick would go in and sell it for 20. If
he was selling for 20, Rick would sell for 10. Sometimes, he be giving (it)
Before long, Blandon was giving Ross hundreds of kilos of cocaine on
consignment -- sell now, pay later -- a strategy that dramatically accelerated
the expansion of Ross' crack empire, even beyond California's borders.
Ross said he never discovered how Blandon was able to get cocaine so cheaply.
''I just figured he knew the people, you know what I'm saying? He was
But Freeway Rick had no idea just how ''plugged'' his erudite cocaine broker
was. He didn't know about Norwin Meneses, or the CIA, or the Salvadoran air
force planes that allegedly were flying the cocaine into an air base in Texas.
And he wouldn't find out about it for another 10 years.
Contra case illustrates the discrepancy: Nicaraguan goes free; L.A. dealer faces life
Published: Aug. 20, 1996
FOR THE LAST YEAR and a half, the U.S. Department of Justice has been trying to
explain why nearly everyone convicted in California's federal courts of
''crack'' cocaine trafficking is black.
Critics, who include some federal court judges, say it looks like the Justice
Department is targeting crack dealers by race, which would be a violation of
the U.S. Constitution.
Federal prosecutors, however, say there's a simple, if unpleasant, reason for
the lopsided statistics: Most crack dealers are black.
''Socio-economic factors led certain ethnic and racial groups to be
particularly involved with the distribution of certain drugs,'' the Justice
Department argued in a case in Los Angeles last year, ''and blacks were
particularly involved in the Los Angeles area crack trade.''
But why -- of all the ethnic and racial groups in California to pick from --
crack planted its deadly roots in L.A.'s black neighborhoods is something only
Oscar Danilo Blandon Reyes can say for sure.
Danilo Blandon, a yearlong Mercury News investigation found, is the Johnny
Appleseed of crack in California -- the Crips' and Bloods' first direct-connect
to the cocaine cartels of Colombia. The tons of cut-rate cocaine he brought
into black L.A. during the 1980s and early 1990s became millions of rocks of
crack, which spawned new crack markets wherever they landed.
On a tape made by the Drug Enforcement Administration in July 1990, Blandon
casually explained the flood of cocaine that coursed through the streets of
South-Central Los Angeles during the previous decade. ''These people have been
working with me 10 years,'' Blandon said. ''I've sold them about 2,000 or 4,000
(kilos). I don't know. I don't remember how many.''
''It ain't that Japanese guy you were talking about, is it?'' asked DEA
informant John Arman, who was wearing a hidden transmitter.
''No, it's not him,'' Blandon insisted. ''These ... these are the black
Arman gasped. ''Black?!''
''Yeah,'' Blandon said. ''They control L.A. The people (black cocaine dealers)
that control L.A.''
But unlike the thousands of young blacks now serving long federal prison
sentences for selling mere handfuls of the drug, Blandon is a free man today.
He has a spacious new home in Nicaragua and a business exporting precious
woods, courtesy of the U.S. government, which has paid him more than
$166,000 over the past 18 months, records show -- for his help in the war on
drugs. That turn of events both amuses and angers ''Freeway Rick'' Ross, L.A.'s
premier crack wholesaler during much of the 1980s and Danilo Blandon's biggest
''They say I sold dope everywhere but, man, I know he done sold 10 times more
dope than me,'' Ross said with a laugh during a recent interview.
Nothing epitomizes the drug war's uneven impact on black Americans more clearly
than the intertwined lives of Ricky Donnell Ross, a high school dropout, and
his suave cocaine supplier, Danilo Blandon, who has a master's degree in
marketing and was one of the top civilian leaders in California of an
anti-communist guerrilla army formed by the U.S. Central Intelligence Agency.
Called the Fuerza Democratica Nicaraguense (FDN), it became known to most
Americans as the Contras. In recent court testimony, Blandon, who began
dealing cocaine in South-Central L.A. in 1982, swore that the first kilo of
cocaine he sold in California was to raise money for the CIA's army, which was
trying on a shoestring to unseat Nicaragua's new socialist Sandinista
After Blandon crossed paths with Ross, a South-Central teen-ager who had the
gang connections and street smarts necessary to move the army's cocaine, a
veritable blizzard engulfed the ghettos.
Former Los Angeles Police narcotics detective Stephen W. Polak said he was
working the streets of South-Central in the mid-1980s when he and his partners
began seeing more cocaine than ever before.
''A lot of detectives, a lot of cops, were saying, hey, these blacks, no longer
are we just seeing gram dealers. These guys are doing ounces; they were doing
keys,'' Polak recalled. But he said the reports were pooh-poohed by higher-ups
who couldn't believe black neighborhoods could afford the amount of cocaine the
street cops claimed to be seeing.
''Major Violators (the LAPD's elite anti-drug unit) was saying, basically, ahh,
South-Central, how much could they be dealing?'' said Polak, a 21-year LAPD
veteran. ''Well, they (black dealers) went virtually untouched for a long
It wasn't until January 1987 -- when crack markets were popping up in major
cities all over the U.S. -- that law enforcement brass decided to confront
L.A.'s crack problem head-on. They formed the Freeway Rick Task Force, a cadre
of veteran drug agents whose sole mission was to put Rick Ross out of business.
Polak was a charter member.
''We just dedicated seven days a week to him. We were just on him at every
move,'' Polak said.
Ross, as usual, was quick to spot a trend. He moved to Cincinnati and quietly
settled into a home in the woodsy Republican suburbs on the east side of town.
''I called it cooling out, trying to back away from the game,'' Ross said. ''I
had enough money.''
His longtime supplier, Blandon, reached an identical conclusion around the same
time. A massive police raid on his cocaine operation in late 1986 nearly gave
his wife a nervous breakdown, he testified recently, and by the summer of 1987
he was safely ensconced in Miami, with $1.6 million in cash.
Some of his drug profits, records show, were invested in a string of rental
car and export businesses in Miami, often in partnership with an exiled
Nicaraguan judge named Jose Macario Estrada. Like Blandon, the judge also
worked for the CIA's army, helping FDN soldiers and their families obtain
visas and work papers in the United States. Estrada said he knew nothing of
Blandon's drug dealings at the time.
Blandon also bought into a swank steak-and-lobster restaurant called La
Parrilla, which became a popular hangout for FDN leaders and supporters. The
Miami Herald called it the ''best Nicaraguan restaurant in Dade County'' and
gave it a four-star rating, its highest.
But neither Ross nor Blandon stayed ''retired'' for long.
A manic deal-maker, Ross found Cincinnati's virgin crack market too seductive
to ignore. When he left Los Angeles, the price of a kilo was around $12,000. In
the Queen City, Ross chuckled, ''keys was selling for $50,000. It was like when
I first started.''
Plunging back in, the crack tycoon cornered the Cincinnati market using the
same low-price, high-volume strategy -- and the same Nicaraguan drug
connections -- he'd used in L.A. Soon, he was selling crack as far away as
Cleveland, Indianapolis, Dayton and St. Louis.
''There's no doubt in my mind crack in Cincinnati can be traced to Ross,''
police officer Robert Enoch told a Cincinnati newspaper three years ago.
But Ross' reign in the Midwest was short-lived. In 1988, one of his loads ran
into a drug-sniffing dog at a New Mexico bus station and drug agents eventually
connected it to Ross. He pleaded guilty to crack trafficking charges and
received a mandatory 10-year prison sentence, which he began serving in 1990.
In sunny Miami, Blandon's retirement plans also had gone awry. His 24-city
rental car business collapsed in 1989 and later went into bankruptcy. To make
money, he testified, he came to the Bay Area and began brokering cocaine again,
buying and selling from the same Nicaraguan dealers he'd known from his days
with the FDN. In 1990 and 1991, he testified, he sold about 425 kilos of
cocaine in Northern California -- $10.5 million worth at wholesale prices.
But unlike before, when he was selling cocaine for the Contras, Blandon was
constantly dogged by the police.
Twice in six months he was detained, first by Customs agents while taking
$117,000 in money orders to Tijuana to pay a supplier, and then by the LAPD in
the act of paying one of his Colombian suppliers more than $350,000.
The second time, after police found $14,000 in cash and a small quantity of
cocaine in his pocket, he was arrested. But the U.S. Justice Department --
saying a prosecution would disrupt an active investigation -- persuaded the
cops to drop their money laundering case.
Soon after that, Blandon and his wife, Chepita, were called down to the U.S.
Immigration and Naturalization Service office in San Diego on a pretense and
scooped up by DEA agents, on charges of conspiracy to distribute cocaine. They
were jailed without bond as dangers to the community and several other
Nicaraguans were also arrested.
Blandon's prosecutor, L.J. O'Neale, told a federal judge that Blandon had sold
so much cocaine in the United States his mandatory prison sentence was ''off
Then Blandon ''just vanished,'' said Juanita Brooks, a San Diego attorney who
represented one of Blandon's co-defendants. ''All of a sudden his wife was out
of jail and he was out of the case.''
The reasons were contained in a secret Justice Department memorandum filed in
San Diego federal court in late 1993.
Blandon, prosecutor O'Neale wrote, had become ''extraordinarily valuable in
major DEA investigations of Class I drug traffickers.'' And even though
probation officers were recommending a life sentence and a $4 million fine,
O'Neale said the government would be satisfied if Blandon got 48 months and no
fine. Motion granted.
Less than a year later, records show, O'Neale was back with another idea: Why
not just let Blandon go? After all, he wrote the judge, Blandon had a federal
O'Neale, saying that Blandon ''has almost unlimited potential to assist the
United States,'' said the government wanted ''to enlist Mr. Blandon as a
full-time, paid informant after his release from prison.''
And since it would be hard to do that job with parole officers snooping around,
O'Neale added, the government wanted him turned loose without any supervision.
Motion granted. O'Neale declined to comment.
After only 28 months in custody, most of it spent with federal agents who
debriefed him for ''hundreds of hours,'' he said, Blandon walked out of the
Metropolitan Correctional Center in San Diego, was given a green card and began
working on his first assignment: setting up his old friend ''Freeway Rick'' for
a sting operation.
Records show Ross was still behind bars, awaiting parole, when San Diego DEA
agents targeted him for a ''reverse'' sting -- one in which government agents
provide the drugs and the target provides the cash. The sting's author, DEA
agent Chuck Jones, has testified that he had no evidence Ross was dealing drugs
from his prison cell, where he'd spent the past four years.
But during his incarceration Ross did something that, in the end, may have been
even more foolhardy: He testified against Los Angeles police officers, as a
witness for the U.S. government.
Soon after Ross went to prison for the Cincinnati bust, federal prosecutors
from Los Angeles came to see him, dangling a tantalizing offer. A massive
scandal was sweeping the L.A. County sheriff's elite narcotics squads, and
among the dozens of detectives fired or indicted for allegedly beating suspects,
stealing drug money and planting evidence were members of the old Freeway Rick
If Ross would testify about his experiences, he was told, it could help him
get out of jail.
In 1991, he took the stand against his old nemesis, LAPD detective Steve Polak,
who eventually pleaded guilty to a misdemeanor charge of excessive use of force
and retired. But the deal Ross got from federal prosecutors for testifying --
five years off his sentence and an agreement that his remaining drug profits
would not be seized -- galled many.
''Ross will fall again someday,'' Polak bitterly told a Los Angeles Times
reporter in late 1994. By then, the trip wires were already strung.
Within days of Ross' parole in October 1994, he and Blandon were back in touch
and their conversation quickly turned to cocaine. It was almost like old times,
except that Ross was now hauling trash for a living. He was also behind on his
mortgage payments for an old theater he owned in South-Central, which he was
trying to turn into a youth academy. According to tapes Blandon made of some of
their discussions, Ross repeatedly told Blandon that he was broke and couldn't
afford to finance a drug deal. But Ross did agree to help his old mentor, who
was also pleading poverty, find someone else to buy the 100 kilos of cocaine
Blandon claimed he had.
On March 2, 1995, in a shopping center parking lot in National City, near San
Diego, Ross poked his head inside a cocaine-laden Chevy Blazer and the place
exploded with police. Ross jumped into a friend's pickup and zoomed off
''looking for a wall that I could crash myself into,'' he said. ''I just wanted
to die.'' He was captured after the truck careened into a hedgerow and has been
held in jail without bond since then.
Ross' arrest netted Blandon $45,500 in government rewards and expenses, records
show. On the strength of Blandon's testimony, Ross and two other men were
convicted of cocaine conspiracy charges in San Diego last March -- conspiring
to sell the DEA's cocaine. Sentencing is set for Aug. 23. Ross is facing a life
sentence without the possibility of parole. The other men are looking at 10- to
20- year sentences. Acquaintances say Blandon, who refused repeated interview
requests, is a common sight these days in Managua's better restaurants,
drinking with friends and telling of his ''escape'' from U.S. authorities.
According to his Miami lawyer, Blandon spends most of his time shuttling
between San Diego and Managua, trying to recover Nicaraguan properties he left
behind in 1979, when the socialists seized power and sent him running to the