By Robert Parry

October 25, 2004 | In December 1985, when Brian Barger and I wrote a groundbreaking story for the Associated Press about Nicaraguan Contra rebels smuggling cocaine into the United States, one U.S. senator put his political career on the line to follow up on our disturbing findings. His name was John Kerry.

Yet, over the past year, even as Kerry's heroism as a young Navy officer in Vietnam has become a point of controversy, this act of political courage by a freshman senator has gone virtually unmentioned, even though -- or perhaps because -- it marked Kerry's first challenge to the Bush family.

In early 1986, the 42-year-old Massachusetts Democrat stood almost alone in the U.S. Senate demanding answers about the emerging evidence that CIA-backed Contras were filling their coffers by collaborating with drug traffickers then flooding U.S. borders with cocaine from South America.

Kerry assigned members of his personal Senate staff to pursue the allegations. He also persuaded the Republican majority on the Senate Foreign Relations Committee to request information from the Reagan-Bush administration about the alleged Contra drug traffickers.

In taking on the inquiry, Kerry challenged President Ronald Reagan at the height of his power, at a time he was calling the Contras the "moral equals of the Founding Fathers." Kerry's questions represented a particular embarrassment to Vice President George H.W. Bush, whose responsibilities included overseeing U.S. drug-interdiction policies.

Kerry took on the investigation though he didn't have much support within his own party. By 1986, congressional Democrats had little stomach left for challenging the Reagan-Bush Contra war. Not only had Reagan won a historic landslide in 1984, amassing a record 54 million votes, but his conservative allies were targeting individual Democrats viewed as critical of the Contras fighting to oust Nicaragua's leftist Sandinista government. Most Washington journalists were backing off, too, for fear of getting labeled "Sandinista apologists" or worse.

Kerry's probe infuriated Reagan's White House, which was pushing Congress to restore military funding for the Contras. Some in the administration also saw Kerry's investigation as a threat to the secrecy surrounding the Contra supply operation, which was being run illegally by White House aide Oliver North and members of Bush's vice presidential staff.

Through most of 1986, Kerry's staff inquiry advanced against withering political fire. His investigators interviewed witnesses in Washington, contacted Contra sources in Miami and Costa Rica, and tried to make sense of sometimes convoluted stories of intrigue from the shadowy worlds of covert warfare and the drug trade.

Kerry's chief Senate staff investigators were Ron Rosenblith, Jonathan Winer and Dick McCall. Rosenblith, a Massachusetts political strategist from Kerry's victorious 1984 campaign, braved both political and personal risks as he traveled to Central America for face-to-face meetings with witnesses. Winer, a lawyer also from Massachusetts, charted the inquiry's legal framework and mastered its complex details. McCall, an experienced congressional staffer, brought Capitol Hill savvy to the investigation.

Behind it all was Kerry, who combined a prosecutor's sense for sniffing out criminality and a politician's instinct for pushing the limits. The Kerry whom I met during this period was a complex man who balanced a rebellious idealism with a determination not to burn his bridges to the political establishment.

The Reagan administration did everything it could to thwart Kerry's investigation, including attempting to discredit witnesses, stonewalling the Senate when it requested evidence and assigning the CIA to monitor Kerry's probe. But it couldn't stop Kerry and his investigators from discovering the explosive truth: that the Contra war was permeated with drug traffickers who gave the Contras money, weapons and equipment in exchange for help in smuggling cocaine into the United States. Even more damningly, Kerry found that U.S. government agencies knew about the Contra-drug connection, but turned a blind eye to the evidence in order to avoid undermining a top Reagan-Bush foreign policy initiative.

The Reagan administration's tolerance and protection of this dark underbelly of the Contra war represented one of the most sordid scandals in the history of U.S. foreign policy. Yet when Kerry's bombshell findings were released in 1989, they were greeted by the mainstream press with disdain and disinterest. The New York Times, which had long denigrated the Contra-drug allegations, buried the story of Kerry's report on its inside pages, as did the Washington Post and the Los Angeles Times. For his tireless efforts, Kerry earned a reputation as a reckless investigator. Newsweek's Conventional Wisdom Watch dubbed Kerry a "randy conspiracy buff."

But almost a decade later, in 1998, Kerry's trailblazing investigation was vindicated by the CIA's own inspector general, who found that scores of Contra operatives were implicated in the cocaine trade and that U.S. agencies had looked the other way rather than reveal information that could have embarrassed the Reagan-Bush administration.

Even after the CIA's admissions, the national press corps never fully corrected its earlier dismissive treatment. That would have meant the New York Times and other leading publications admitting they had bungled their coverage of one of the worst scandals of the Reagan-Bush era.

The warm and fuzzy glow that surrounded Ronald Reagan after he left office also discouraged clarification of the historical record. Taking a clear-eyed look at crimes inside Reagan's Central American policies would have required a tough reassessment of the 40th president, which to this day the media has been unwilling to do. So this formative period of Kerry's political evolution has remained nearly unknown to the American electorate.

Two decades later, it's hard to recall the intensity of the administration's support for the Contras. They were hailed as courageous front-line fighters, like the Mujahedin in Afghanistan, defending the free world from the Soviet empire. Reagan famously warned that Nicaragua was only "two days' driving time from Harlingen, Texas."

Yet, for years, Contra units had gone on bloody rampages through Nicaraguan border towns, raping women, torturing captives and executing civilian officials of the Sandinista government. In private, Reagan referred to the Contras as "vandals," according to Duane Clarridge, the CIA officer in charge of the operation, in his memoir, "A Spy for All Seasons." But in public, the Reagan administration attacked anyone who pointed out the Contras' corruption and brutality.

The Contras also proved militarily inept, causing the CIA to intervene directly and engage in warlike acts, such as mining Nicaragua's harbors. In 1984, these controversies caused the Congress to forbid U.S. military assistance to the Contras -- the Boland Amendment -- forcing the rebels to search for new funding sources.

Drug money became the easiest way to fill the depleted Contra coffers. The documentary evidence is now irrefutable that a number of Contra units both in Costa Rica and Honduras opened or deepened ties to Colombian cartels and other regional drug traffickers. The White House also scrambled to find other ways to keep the Contras afloat, turning to third countries, such as Saudi Arabia, and eventually to profits from clandestine arms sales to Iran.

The secrets began to seep out in the mid-1980s. In June 1985, as a reporter for the Associated Press, I wrote the first story mentioning Oliver North's secret Contra supply operation. By that fall, my AP colleague Brian Barger and I stumbled onto evidence that some of the Contras were supplementing their income by helping traffickers transship cocaine through Central America. As we dug deeper, it became clear that the drug connection implicated nearly all the major Contra organizations.

The AP published our story about the Contra-cocaine evidence on Dec. 20, 1985, describing Contra units "engaged in cocaine smuggling, using some of the profits to finance their war against Nicaragua's leftist government." The story provoked little coverage elsewhere in the U.S. national press corps. But it pricked the interest of a newly elected U.S. senator, John Kerry. A former prosecutor, Kerry also heard about Contra law violations from a Miami-based federal public defender named John Mattes, who had been assigned a case that touched on Contra gunrunning. Mattes' sister had worked for Kerry in Massachusetts.

By spring 1986, Kerry had begun a limited investigation deploying some of his personal staff in Washington. As a member of the Senate Foreign Relations Committee, Kerry managed to gain some cooperation from the panel's Republican leadership, partly because the "war on drugs" was then a major political issue. Besides looking into Contra drug trafficking, Kerry launched the first investigation into the allegations of weapons smuggling and misappropriation of U.S. government funds that were later exposed as part of North's illegal operation to supply the Contras.

Kerry's staff soon took an interest in a federal probe in Miami headed by assistant U.S. Attorney Jeffrey Feldman. Talking to some of the same Contra supporters whom we had interviewed for the AP's Contra-cocaine story, Feldman had pieced together the outlines of North's secret network.

In a panicked memo dated April 7, 1986, one of North's Costa Rican-based private operatives, Robert Owen, warned North that prosecutor Feldman had shown Ambassador Lewis Tambs "a diagram with your name underneath and John [Hull]'s underneath mine, then a line connecting the various resistance groups in C.R. [Costa Rica]. Feldman stated they were looking at the 'big picture' and not only looking at possible violations of the Neutrality Act, but a possible unauthorized use of government funds." (For details, see my "Lost History: Contras, Cocaine, the Press and 'Project Truth.'")

John Hull was an American farmer with a ranch in Costa Rica near the Nicaraguan border. According to witnesses, Contras had used Hull's property for cocaine transshipments. (Hull was later accused of drug trafficking by Costa Rican authorities, but fled the country before facing trial. He returned to the United States.)

On April 10, 1986, Barger and I reported on the AP wire that the U.S. Attorney's office in Miami was examining allegations of Contra gunrunning and drug trafficking. The AP story rattled nerves inside the Reagan administration. On an unrelated trip to Miami, Attorney General Edwin Meese pulled U.S. Attorney Leon Kellner aside and asked about the existence of this Contra probe.

Back in Washington, other major news organizations began to sniff around the Contra-cocaine story but mostly went off in wrong directions. On May 6, 1986, the New York Times relied for a story on information from Meese's spokesman Patrick Korten, who claimed "various bits of information got referred to us. We ran them all down and didn't find anything. It comes to nothing."

But that wasn't the truth. In Miami, Feldman and FBI agents were corroborating many of the allegations. On May 14, 1986, Feldman recommended to his superiors that the evidence of Contra crimes was strong enough to justify taking the case to a grand jury. U.S. Attorney Kellner agreed, scribbling on Feldman's memo, "I concur that we have sufficient evidence to ask for a grand jury investigation."

But on May 20, less than a week later, Kellner reversed that recommendation. Without telling Feldman, Kellner rewrote the memo to state that "a grand jury investigation at this point would represent a fishing expedition with little prospect that it would bear fruit." Kellner signed Feldman's name to the mixed-metaphor memo and sent it to Washington on June 3.

The revised "Feldman" memo was then circulated to congressional Republicans and leaked to conservative media, which used it to discredit Kerry's investigation. The right-wing Washington Times denounced the probe as a wasteful political "witch hunt" in a June 12, 1986, article. "Kerry's anti-Contra efforts extensive, expensive, in vain," screamed the headline of a Washington Times article on Aug. 13, 1986.

Back in Miami, Kellner reassigned Feldman to unrelated far-flung investigations, including one to Thailand.

The altered memo was instrumental in steering Senate Foreign Relations Committee Chairman Richard Lugar, R-Ind., away from holding hearings, Kerry's later Contra-drug report, "Law Enforcement and Foreign Policy," stated. "Material provided to the Committee by the Justice Department and distributed to members following an Executive Session June 26, 1986, wrongly suggested that the allegations that had been made were false," the Kerry report said.

Feldman later testified to the Senate that he was told in 1986 that representatives of the Justice Department, the Drug Enforcement Administration and the FBI had met "to discuss how Senator Kerry's efforts to get Lugar to hold hearings on the case could be undermined."

Mattes, the federal public defender in Miami, watched as the administration ratcheted up pressure on Kerry's investigation. "From a political point of view in May of '86, Kerry had every reason to shut down his staff investigation," Mattes said. "There was no upside for him doing it. We all felt under the gun to back off."

The Kerry that Mattes witnessed at the time was the ex-prosecutor determined to get to the bottom of serious criminal allegations even if they implicated senior government officials. "As an investigator, he had a sense it was there," said Mattes, who is now an investigative reporter for Fox News in San Diego. "Kerry was a crusader. He was the consummate outsider, doing what you expect people to do. ... At no point did he flinch."

Years later, in the National Archives, I discovered a document showing that the Central Intelligence Agency also was keeping tabs on Kerry's investigation. Alan Fiers Jr., who served as the CIA's Central American Task Force chief, told independent counsel Lawrence Walsh's Iran-Contra investigators that the AP and Feldman's investigations had attracted the hostility of the Reagan-Bush administration. Fiers said he "was also getting a dump on the Senator Kerry investigation about mercenary activity in Central America from the CIA's legislative affairs people who were monitoring it."

Negative publicity about the Contras was particularly unwelcome to the Reagan-Bush administration throughout the spring and summer 1986 as the White House battled to restore U.S. government funding to the Contras. In the politically heated atmosphere, the administration sought to smear anti-Contra witnesses cooperating with Kerry's investigation.

In a July 28 memo, initialed as read by President Reagan, North labeled onetime Contra mercenary Jack Terrell as a "terrorist threat" because of his "anti-Contra and anti-U.S. activities." North said Terrell had been cooperating "with various congressional staffs in preparing for hearings and inquiries regarding the role of U.S. government officials in illegally supporting the Nicaraguan resistance."

In August 1986, FBI and Secret Service agents hauled Terrell in for two days of polygraph examinations on suspicion that Terrell intended to assassinate President Reagan, an allegation that proved baseless. But Terrell told me later that the investigation had chilled his readiness to testify about the Contras. "It burned me up," he said. "The pressure was always there."

Beyond intimidating some witnesses, the Reagan administration systematically worked to frustrate Kerry's investigation. Years later, one of Kerry's investigators, Jack Blum, complained publicly that the Justice Department had actively obstructed the congressional probe. Blum said William Weld, who took over as assistant attorney general in charge of the criminal division in September 1986, was an "absolute stonewall" blocking the Senate's access to evidence on Contra-cocaine smuggling. "Weld put a very serious block on any effort we made to get information," Blum told the Senate Intelligence Committee a decade after the events. "There were stalls. There were refusals to talk to us, refusals to turn over data."

Weld, who later became Massachusetts governor and lost to Kerry in the 1996 Senate race, denied that he had obstructed Kerry's Contra probe. But it was clear that the Senate Foreign Relations Committee was encountering delays in getting information that had been requested by Chairman Lugar, a Republican, and Rhode Island Sen. Claiborne Pell, the ranking Democrat. At Kerry's suggestion, they had sought files on more than two dozen people linked to the Contra operations and suspected of drug trafficking.

Inside the Justice Department, senior career investigators grew concerned about the administration's failure to turn over the requested information. "I was concerned that we were not responding to what was obviously a legitimate congressional request," Mark Richard, one of Weld's top deputies, testified in a deposition. "We were not refusing to respond in giving explanations or justifications for it. We were seemingly just stonewalling what was a continuing barrage of requests for information. That concerned me no end."

On Sept. 26, 1986, Kerry tried to spur action by presenting Weld with an 11-page "proffer" statement from a 31-year-old FBI informant who had worked with the Medellin cartel and had become a witness on cartel activities. The woman, Wanda Palacio, had approached Kerry with an account about Colombian cocaine kingpin Jorge Ochoa bragging about payments he had made to the Nicaraguan Contras.

As part of this Contra connection, Palacio said pilots for a CIA-connected airline, Southern Air Transport, were flying cocaine out of Barranquilla, Colombia. She said she had witnessed two such flights, one in 1983 and the other in October 1985, and quoted Ochoa saying the flights were part of an arrangement to exchange "drugs for guns."

According to contemporaneous notes of this "proffer" meeting between Weld and Kerry, Weld chuckled that he was not surprised at allegations about corrupt dealings by "bum agents, former and current CIA agents." He promised to give serious consideration to Palacio's allegations.

After Kerry left Weld's office, however, the Justice Department seemed to concentrate on poking holes in Palacio's account, not trying to corroborate it. Though Palacio had been considered credible in her earlier testimony to the FBI, she was judged to lack credibility when she made accusations about the Contras and the CIA.

On Oct. 3, 1986, Weld's office told Kerry that it was rejecting Palacio as a witness on the grounds that there were some contradictions in her testimony. The discrepancies apparently related to such minor points as which month she had first talked with the FBI.

Two days after Weld rejected Palacio's Contra-cocaine testimony, other secrets about the White House's covert Contra support operations suddenly crashed --literally -- into view.