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Witness: North Wanted to Give Anti-Drug Money to Contras Instead

July 29, 1988

WASHINGTON (AP) _ A U.S. drug enforcement official says former White House staffer Oliver L. North suggested in 1984 that $1.5 million designated for a drug sting operation be diverted to the Nicaraguan Contras instead.

Ron Caffrey, now in charge of the Atlanta office of the Drug Enforcement Administration, told a House panel Thursday the DEA rejected the idea. Caffrey said he told North the suggestion would have compromised the chief operative in one of the agency’s most significant undercover operations.

As it turned out, according to Caffrey and other DEA witnesses, the investigation was compromised anyway - and closed prematurely - several weeks later when details were leaked to the Washington Times.

The hearing was the first in a series by the Judiciary subcommittee on crime, which is trying to learn whether Reagan administration officials condoned drug smuggling and other criminal activities to further its Central American policy - especially winning aid for the Contra rebels.

Chairman William J. Hughes, D-N.J., said the panel has ″discovered many, many instances of persons in or associated with ... elements of our government attempting to convert, to divert, and to subvert the criminal justice process.″

North, who has been indicted in the separate diversionof millions of dollars from the administration’s Iran arms sales to the Contras, figured prominently in Thursday’s testimony.

The testimony focused on a 1984 sting operation, in which DEA used convicted drug pilot Barry Seal to make contact with the Colombian cocaine cartel - then operating in Nicaragua - and a purported Nicaraguan government official, Federico Vaughn.

Hughes later said the committee has doubts about whether Vaughn was in fact part of the government.

Nonetheless, four DEA witnesses said North was interested in exposing an alleged involvement of the marxist Nicaraguan government in drug smuggling, so the Reagan administration could win an upcoming congressional vote on Contra aid.

Caffrey, who was in charge of the DEA cocaine desk in 1984, said he briefed North on the undercover operation in late June or early July 1984, after Barry Seal had brought cocaine back from Nicaragua to the United States.

Seal at the time was functioning as a DEA operative, hoping his cooperation would bring him a lenient sentence.

Caffrey said he told North that the DEA planned to send Seal back to Nicaragua to make a $1.5 million payment for the drugs he brought back, with the money to be split between the Colombia drug kingpins in Nicaragua and Nicaraguan officials.

″Col. North asked why we couldn’t land the plane outside Managua and turn the money over to the Contras,″ Caffrey said.

The DEA official said he responded that such a plan would jeopardize Seal, who had won the trust of the Colombian drug cartel and of Vaughn, identified by the DEA witnesses as an official of the Nicaraguan interior ministry.

Most of the hearing centered on the news leak to the Washington Times, which published its story on the Seal operation July 17, 1984. Seal then became a government witness rather than an operative, but was machine-gunned to death in early 1986 after declining federal protection.

Caffrey said when he briefed North on the operation before the story was leaked, the then-National Security Council staffer ″asked when the operation could go public.″

He added that North ″did indicate to me there was a vote coming up on an appropriation bill to aid the Contras. I told him public disclosure would come from the U.S. attorney or the attorney general ... but we had a lot of goals left in the investigation″ and did not want to compromise it.

Ernst Jacobsen, the DEA undercover agent who directed Seal, said that following the leak, ″I heard from my superiors the leak came from an aide in the White House.″ Still an undercover agent, Jacobsen testified from behind a screen.

A former top DEA official, ex-assistant administrator Frank Monastero, testified, ″I thought the leak came from the White House because of the Contra vote that was coming up.″

Monastero told the subcommittee that the day the news story appeared, an irate North called him to deny that he was responsible for the leak. North, he said, accused the DEA of telling a reporter that North was the source of the information.

″He called to say he did not leak the information and the proof was the facts (in the story) were not accurate,″ Monastero said. ″My response was, ‘That’s the standard way to cover your tracks.’ I didn’t accept that.″

Pages from North’s diary, released by the subcommittee, show the former White House staffer made frequent references to the drug operation in the weeks before the leak.

And the diary shows he was aware of photographs from the investigation showing cocaine being loaded at a Nicaraguan airstrip.

Jacobsen said that shortly before the leak, a CIA agent in Miami told him the spy agency planned to leak the material to the news media to suggest Sandinista involvement in drug smuggling.

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