Tran­scripts from Gary Webb’s orig­i­nal San Jose Mer­cury News series

August 22, 1996
Trio cre­ated mass mar­ket in U.S. for crack cocaine
by Gary Webb
San Jose Mer­cury News

If they’d been in a more respectable line of work, Nor­win Mene­ses, Oscar Danilo Blandón Reyes and “Free­way Rick” Ross would have been hailed as geniuses of marketing.

This odd trio — a smug­gler, a bureau­crat and a ghetto teenager — 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. Tomor­row, 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 has been a strictly guarded secret.

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.

Biggest mil­i­tary upset
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.

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 Blandón Reyes gath­ered his wife and young daugh­ter and flew into exile in California.

Today, Blandón 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 Angeles.

Blandón 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.

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 a heav­ily cen­sored parole report, which sur­faced dur­ing the March trial.

That ven­ture began, Blandón tes­ti­fied, with a phone call from a wealthy col­lege friend in Miami.

Blandón 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, Blandón said, he’d never met Mene­ses until that day.

“I picked him up, and he started telling me that we had to (raise) some money and to send to Hon­duras,” Blandón 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 known 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.

Rea­gan OKs covert oper­a­tions
White House records show that shortly before Blandón’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 fight­ing force.

After meet­ing with Bermudez, Blandón tes­ti­fied, he and Mene­ses “started rais­ing money for the con­tra revolution.”

While Blandón says Bermudez didn’t know cocaine would be the fund-raising device they used, the pres­ence of the mys­te­ri­ous Mr. Mene­ses strongly sug­gests otherwise.

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.

Despite 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.

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 California.

Blandón, he said, was assigned to raise money in Los Angeles.

Blandón said Mene­ses gave him two kilo­grams of cocaine (roughly 4 1/2 pounds) and sent him 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. . . .”

To find cus­tomers, Blandón and sev­eral other Nicaraguan exiles work­ing with him headed for the vast, untapped mar­kets of L.A.‘s black ghettos.

Blandón’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.

Emer­gence of 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 Angeles.

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.

A friend of Ross’ — a col­lege foot­ball player home at Christ­mas from San Jose State Uni­ver­sity — told him “cocaine was going to be the new thing, that every­body was doing it.” Intrigued, Ross set off to find out more.

Through a cocaine-using auto-upholstery teacher Ross knew, he met a Nicaraguan named Henry Cor­rales, who began sell­ing Ross and a friend , Ollie “Big Loc” Newell, small amounts of remark­ably inex­pen­sive cocaine.

Thanks to a net­work of friends in South-Central L.A. and Comp­ton, includ­ing many mem­bers of var­i­ous Crips gangs, the pair steadily built up clien­tele. With each sale, Ross rein­vested his hefty prof­its in more cocaine.

Even­tu­ally, Cor­rales intro­duced Ross and Newell to his sup­plier, Blandón. 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 Blandón, told drug agents in a 1992 inter­view that after a slow start, “Blandón’s cocaine busi­ness dra­mat­i­cally increased. . . . Nor­win Mene­ses, Blandón’s sup­plier as of 1983 and 1984, rou­tinely flew quan­ti­ties of 200 to 400 kilo­grams from Miami to the West Coast.”

Blandón 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 said.

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 spreading.”

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 Blandón, 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 Blandón’s cocaine prices. “It was unreal. We were just wip­ing out everybody.”

“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) away.”

Ross said he never dis­cov­ered how Blandón was able to get cocaine so cheaply. “I just fig­ured he knew the peo­ple, you know what I’m say­ing? He was plugged.”

But Free­way Rick had no idea just how “plugged” his eru­dite cocaine bro­ker was. He didn’t know about 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.