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Witness Claims Contra Drug Smuggling, Payoffs To Cuban, Bahamian Officials With

July 16, 1987

Witness Claims Contra Drug Smuggling, Payoffs To Cuban, Bahamian Officials With PM-US-Iran-Contra Rdp Bjt

WASHINGTON (AP) _ A convicted cocaine trafficker who says he helped the Nicaraguan Contras smuggle drugs into the United States claims he also made payoffs to officials in Cuba and the Bahamas to conduct his business.

George Morales, who is serving a 16-year federal prison sentence in Miami, made his revelations about Cuba for the first time Wednesday at a hearing of the Senate Foreign Relations subcommittee on drugs.

Morales said he worked with Cuban officials in the drug trade between 1980 and 1984. He said payoffs were made directly to Cuban authorities who, in turn, asked Morales to buy merchandise such as boats for them.

In all, Morales, once a large drug smuggler with a fleet of planes, helicopters and boats, said he laundered about $500,000 in illegal drug profits through Cuba.

Although Cuban authorities gave him a special code that enabled his aircraft to evade radar, Morales said he was never asked to gather intelligence on the United States for Fidel Castro’s regime.

He told Sen. Jesse Helms, R-N.C., that Cuba offers safe haven for drug traffickers. Morales said he also bribed Bahamian officials to turn a blind eye to the drug trade, and he laundered money through Panama.

Sen. John Kerry, D-Mass., chairman of the subcommittee, said the purpose of Morales’ testimony was to determine what steps the United States could take to lessen the impact of narcotics money.

But Kerry said the hearing was ″obviously incomplete″ because many of Morales’ statements needed corroboration.

Morales, an athletic-looking man with a trimmed beard, looked more like a banker than drug smuggler in his crisp blue suit. He appeared at the hearing in the custody of federal marshals.

With his thick accent and soft voice, senators had difficulty understanding the Colombian-born Morales at times.

A major part of Morales’ testimony dealt with his allegations against the Contras, who repeatedly have denied drug dealing. Morales said he was willing to take a lie detector test to back up his statements.

″We’ve heard this gentleman’s accusations before. He is a convicted drug dealer,″ said Contra spokesman Ernesto Palazio, adding that the Contras are ″more interested than anyone else″ in finding out about alleged drug smuggling so the rebel leadership can take the appropriate action.

Morales, 38, a naturalized American citizen who is known for his speed boat racing prowess, said he became seriously involved with the Contras about a month after he was indicted on a drug charge in March 1984.

In exchange for Morales’ help, three men connected to the Contras promised to ″take care of my (legal) problem, and to a large extent they did.″ The men represented themselves as having connections with the CIA, Morales said. The CIA has repeatedly said it is not involved in drug smuggling.

Morales, who owned an air cargo company and was arrested about a year ago, helped the Contras ship weapons - including M-16s, C-4 explosive and machine guns - primarily to Costa Rica between June 1984 and January 1986.

He said the planes were flown to the ranch of John Hull, an American-born farmer living in Costa Rica. Hull has strenously denied any involvement in drug trafficking.

On at least seven occasions, Morales said his airplanes were loaded with weapons in Florida, flown to Central America and then brought back with drugs on board.

The drugs were sold in the United States, with the profits of ″many, many millions of dollars″ given to the Contras, he said.

Morales said he never personally flew the runs into Central America, but he trained the pilots and helped load the aircraft at the three Florida airports used.

″We flew guns out of Fort Lauderdale airport, Executive Airport (in Fort Lauderdale) and Opalocka Airport,″ he said, adding he saw drugs brought back on the aircraft.

Kerry asked Morales how drugs and weapons could be handled at U.S. airports in broad daylight without attracting attention from customs officials and law enforcement authorities.

″I was very surprised myself,″ Morales said, adding that he expressed concern to Marcos Aguado, one of his contacts from the Contras.

″I remember him specifically telling me not to worry about it. We are the CIA. We are going to be around the plane,″ he said.

Contra spokesman Palazio said he did not know anyone named Aguado.

Morales said he also worked with Adolfo ″Popo″ Chamorro, who was once associated with Eden Pastora and Octaviano Cesar. Pastora, who left the Contra movement in 1986, worked out of Costa Rica, as did Cesar.

Cesar, in an interview with CBS last spring, denied he had been involved in assisting Morales with his legal troubles in exchange for Morales’ cooperation in drug-smuggling or gun-running.

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