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Dark Alliance [Transcript, Pt. 3]

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.