(December, 1997)
Office of the Inspector General
Department of Justice

G. DEA's Investigation of Information It Received About Contras or Contra Sympathizers

1. Information about Contras in General

According to former Costa Rica CA Donald Clements, during the mid-1980s, the DEA Country Office periodically received information from sources other than the CIA that Contras were engaged in drug trafficking. However, he said that this information was usually no more than unsubstantiated and unspecific rumor. Sometimes, informants would give information that the DEA country office would try to verify. The information from the office's informants consisted primarily of allegations that marijuana or cocaine was being grown or stored in Contra mercenary training camps. To try to verify the information, agents of the DEA Country Office went to those camps in an undercover capacity. The most the DEA ever found were some marijuana plants growing. Clements said that this was not unusual at all because "everyone in Costa Rica grew pot in his backyard." Clements said that the only thing he ever saw occurring in the mercenary training camps was "bad military training."

Similarly, according to Clements, there were widespread rumors in Costa Rica that Contras or Contra sympathizers were providing "protection" for drug runners. None of the information was ever specific enough for the DEA to be able to corroborate it, according to Clements. Clements discussed the information with Colonel Luis Barrantes of Costa Rica's anti-narcotics unit, who had also heard the rumors. Clements stated that CIA Chief of Station Joe Fernandez always insisted that there was "no way the Contras were giving protection" to drug runners. Fernandez agreed with Clements' supposition that there might have been Contra sympathizers freelancing and keeping the money for themselves. Clements was never able to find any evidence or any particular information about these "freelancing" Contras.

Clements stated that, although he never received any information that the Contras were involved in the trafficking of cocaine, there was a great the deal of clandestine air traffic passing over Costa Rica or landing in Costa Rica that DEA did not have the ability to track. Clements suspected that they were involved in cocaine smuggling, but he did not have the resources to track the planes closely enough to substantiate his suspicion. Clements believes that he and Sandy Gonzalez reported the suspected clandestine air traffic as intelligence. The OIG did locate a general file kept by SA Sandy Gonzalez entitled "Air Intelligence," which in fact described airplanes suspected of being used for drug trafficking.

Clements asserted that given its substantial resource limitations, the DEA pursued with diligence the few allegations regarding the Contras that the Country Office received. Furthermore, all of the DEA personnel interviewed by OIG vehemently denied that the CIA, other DOJ components, or any other United States government entity ever pressured them to forego investigating Contras or to refrain from doing anything that might interfere with the CIA's Contra operations.

2. Informant Information Received by the DEA

According to a 1987 internal DEA document assessing allegations received by the DEA regarding the Contras and drug trafficking, prepared jointly with the CIA in response to Congressional inquiries on this subject, three "potential informants" provided information alleging that ranches in Costa Rica had been used to smuggle weapons to the Contras and cocaine to the United States. DEA Intelligence Analyst Douglas Everett told the OIG that these informants were Fred Vargis and two other investigators working for him at Backstreet Investigations in Front Royal, Virginia. Vargis and his associates specifically mentioned John Hull's ranch, alleging that it was protected by the CIA and that Hull took advantage of this protection and allowed planes loaded with cocaine to land there, charging $10,000 per landing. According to Everett, the DEA decided not to work with these informants for two reasons: (1) they wanted to be paid a large, fixed sum of money for each kilogram of cocaine the DEA seized as a result of their information and that was "completely unacceptable" to the DEA; and (2) DEA Intelligence realized that the information these informants were providing "seemed to come verbatim" from the "civil lawsuit in Florida" brought by Martha Honey and Tony Avrigan. Everett provided the OIG with a document the DEA received from Backstreet Investigations which set forth all of the information Backstreet gave to the DEA. The OIG reviewed this document and concluded that the DEA was correct in finding that the information parroted previously published information about Hull and the Honey/Avrigan civil suit and the DEA was already aware of some of the information because of the case files compiled by DEA SAs Alfred Czerski and Michael Alston, which are further discussed below. The OIG concluded that the DEA's decision not to work with these informants was a reasonable one.

3. OIG Conclusions

In our review of DEA documents and interviews of DEA personnel, we did not find that the DEA failed to investigate leads against the Contras because of any pressure from the CIA or any other government entity.

H. John Hull

Former Senate investigators for the Kerry Subcommittee highlighted John Hull as someone who appeared to receive special treatment from DOJ because of his alleged ties to the Contras and the CIA. Because of these allegations, we reviewed DOJ's handling of matters related to Hull.

Hull lived in Costa Rica on a large ranch from the 1960s until 1989. Originally from Indiana, he holds dual United States and Costa Rican citizenship. According to CIA records, Hull helped the CIA in its delivery of weapons and "humanitarian aid" (e.g. food and clothing) to the Contras and the families of Contra soldiers. Hull's ranch had airstrips which were used by pilots ferrying arms and other aid in CIA-subsidized operations to help the Contras.

1. Allegations Reviewed

As noted above, allegations were made that Hull rented out his airstrips to drug traffickers, that some Contras using Hull's airstrips were also trafficking in cocaine, and that Hull participated in some of the alleged trafficking. For example, convicted narcotics pilot Gary Betzner testified before the Kerry subommittee that he had used Hull's airstrips when he flew shipments of cocaine on behalf of the Contras. Jorge Morales, also a convicted narcotics trafficker, told the Kerry subcommittee, the DEA, and the CBS television program "West 57th Street" that the Contras used Hull's ranch as a transshipment point in the movement of cocaine destined for the United States. The DEA did not conduct any formal investigation of Hull and he has never been indicted on drug charges in the United States.

We assessed the information the DEA had regarding Hull and the propriety of its actions in response to that information. We also reviewed allegations that DOJ did not pursue fraud allegations made against Hull by the Overseas Private Investment Company (OPIC), an agency of the United States government. In addition, we examined allegations that DOJ has refused to cooperate with the Costa Rican government in its effort to prosecute Hull in Costa Rica on charges of murder, narcotics trafficking, and "hostile acts," and allegations that a DEA agent helped Hull flee from Costa Rica to avoid prosecution.

2. DEA Investigation of Drug Smuggling Allegations

A DEA research report prepared by DEA's Intelligence Division in 1987 stated that DEA's Costa Rica Country Office had received unconfirmed reports that Hull was involved in drug smuggling. Sandalio Gonzalez, DEA's Assistant Country Attache in Costa Rica at the time, told the OIG that the Costa Rica Country Office could not corroborate any of the information it received about John Hull.(84)

The research report also noted that, in November 1986, a DEA informant reported that Colombian cocaine was offloaded at an airstrip on Hull's Costa Rican ranch and then transported into the United States concealed in a shipment of frozen shrimp. Francisco Chanes was a director and registered agent of "Mr. Shrimp," a Miami-based company alleged by the source to have received the shipments.

OIG's review of relevant DEA files revealed that both the Miami and Baltimore Field Offices of the DEA received this information. Both offices tried unsuccessfully to corroborate this information through a "lookout" on the vessels, allegedly used to smuggle the cocaine, which yielded nothing.

In 1987, Alfred Czerski, a Special Agent in the DEA's Baltimore Field Office, received third-hand hearsay from another informant that John Hull and another person were permitting airstrips on their Costa Rican ranches to be used to "offload" cocaine. The cocaine, according to the third-hand information obtained by the informant, was then shipped to two Florida companies, "Mr. Shrimp" and "Ocean Hunter." After debriefing the informant, Czerski opened a general file entitled "Mr. Shrimp."

Czerski told the OIG that he was not able to corroborate the information, "especially from [such a distance away as] Baltimore." Czerski added that this informant usually "did not have anything to back up what he said, and that was true in this case. He was a bounty hunter and when he realized there wasn't much action in Baltimore, he left."

Also in 1987, Michael Alston, a DEA Special Agent stationed in Miami, opened a general file, entitled "Cocaine Smuggling Via Frozen Shrimp," after having received information from an informant that large quantities of cocaine were being concealed in shipments of frozen shrimp in Costa Rica, and then transported to Miami. Alston told the OIG that he believed that he received a teletype from another DEA office, possibly the Baltimore office, transmitting information related to the "tip" Alston received.

We found the teletype from DEA's Baltimore Field Office in Alston's general file. The teletype identified the alleged Miami "consignee" of the shrimp as Mr. Shrimp/Ocean Hunter, Inc., and the alleged Costa Rican shipper as Frigorificos De Puntarenas. After Alston ran a Florida corporate records check, he changed the file title to "Louis Rodriguez," who was listed as the President and Registering agent of Ocean Hunter.

Alston told the OIG that he never received enough information that he could corroborate to develop a case on the corporate entities or the individuals named as corporate officers. John Hull was not mentioned in Alston's general file, and Alston did not recognize Hull's name.

Luis Rodriguez was in fact prosecuted for smuggling cocaine into the United States. The Kerry Subcommittee Report identifies the same Luis Rodriguez as having been indicted in federal court in Florida in 1987 and 1988 on money laundering and narcotics charges investigated by the Federal Bureau of Investigation and the U.S. Customs Service. The NADDIS report on Rodriguez revealed no DEA arrest of Rodriguez during this time period. According to the Kerry Subcommittee, the State Department had used Frigorificos de Puntarenas to transport humanitarian aid to the Contras.

3. Investigation of Allegations that Hull Defrauded the Overseas Private Investment Company

In April 1987, the Overseas Private Investment Corporation (OPIC), an independent United States government agency that assists United States companies which invest overseas, asked DOJ's Civil Division to investigate Hull for alleged fraudulent statements in connection with his successful application for a loan from OPIC. In March, 1984, OPIC loaned $375,000 to Hull and his partnership, "Maderas Tropicales," to fund the expansion of a wood products factory in Quesada City, Costa Rica. Thereafter, the partnership defaulted on the loan. OPIC believed that financial statements submitted in support of the loan contained false statements about the value of Hull's assets, and that the partners had never contributed the $100,000 in equity that the OPIC agreement had obliged them to raise.

In July 1987, the Civil Division referred OPIC's request to the Fraud Section of the Criminal Division. Ellen R. Meltzer, then a Senior Litigation Counsel in that section, was assigned to investigate the allegations and to make a recommendation as to whether Hull or Maderas Tropicales should be prosecuted for criminal fraud. Meltzer and two FBI agents reviewed the allegations.

According to Meltzer, in the course of their inquiry, the weakness of the case became apparent. The first problem was that the statements made by Hull on the loan application were very broadly worded and, therefore, hard to disprove. Meltzer said that another problem was whether OPIC had relied on the partnership's promise to contribute the $100,000 when OPIC agreed to make the loan. Meltzer found that OPIC had always believed that the factory project was viable, regardless of whether the partners ever put up any money. And most importantly, evidence of criminal intent was particularly weak: when interviewed by Meltzer and FBI agents, Hull had claimed that he had been too busy assisting the Contras with humanitarian aid when the loan application had arrived for his signature and he did not review the documents before signing them. One of Hull's partners said that he never understood that he was supposed to put up capital to qualify for the loan; the third partner could not be located by the FBI. Meltzer also discovered that the Loan Agreement was the only document in the entire OPIC loan file that mentioned the contribution of capital. As she later noted: "[E]ven the December, 1983 letter from OPIC to Hull committing the loan funds did not refer to any necessary equity contributions by Hull or his partners, although it mentioned a required United States life insurance policy on the life of Hull with OPIC as the loss payee."

The FBI was unable to trace how the loan proceeds were spent. However, the investigation revealed that OPIC employees had visited Hull in Costa Rica at least three times during the life of the wood products project, examined Hull's claimed expenses, and found that the expenditures Hull listed were supported by invoices he provided OPIC.

In May 1989, Meltzer and FBI agents traveled to Costa Rica to investigate this matter and had extensive meetings with Hull and several of his employees. However, the books and records of the company were not made available to them, as promised. They examined invoices which appeared to be genuine and to reflect purchases of equipment for a wood products factory (e.g. wood surface planers and a fork lift). They also viewed a wood drier and an "open air factory which was erected for the woodworking operation." According to Meltzer, neither she nor the FBI was able to find persuasive evidence that Hull had not intended to use the loan proceeds to operate Maderas Tropicales as a legitimate manufacturer of wood products. She concluded: "It is impossible to say that the operation failed as a result of thievery, rather than as a result of mismanagement, inexperience and antiquated equipment." Nor did the investigative team find any evidence that any of the loan proceeds had been diverted to Contra organizations.

Although the statute of limitations had already run on most of the potential false statement counts, Meltzer told us that she considered whether a conspiracy case could be brought against Hull,"because of the interest expressed in this investigation by several individuals," including members of the Senate Committee on Foreign Relations. She also "gave some thought to a mail fraud case using interest payments on the loan and various letters sent to OPIC by Hull as "mailings in furtherance of a scheme to defraud the agency." Ultimately, Meltzer concluded that, even if some statements made by Hull had been false -- and neither she nor the FBI agents could confirm that the statements were false -- the absence of reliance or evidence of criminal intent made prosecution inappropriate. Accordingly, she recommended to her supervisors in the Fraud Section that Hull not be charged criminally. Laurence A. Urgenson, then the Chief of the Fraud Section, concurred with Meltzer's recommendation, as did Paul L. Maloney, then a Deputy Assistant Attorney General in the Criminal Division.

In July 1990, after the Criminal Division had declined prosecution, the Fraud Section Chief sent a memorandum to the Director of the Commercial Litigation Section of DOJ's Civil Division, informing him of the Fraud Section's decision "so that the Civil Division may take whatever action it deems appropriate." Meltzer told the OIG that, thereafter, "one or two" attorneys from the Commercial Litigation section, whose names she could not recall, came to her office and reviewed her files on the Hull fraud allegations. The Civil Division has no records about Hull, and did not open a case against him.

In evaluating the appropriateness of the action taken by DOJ regarding the allegations that Hull defrauded OPIC, the OIG reviewed OPIC's loan file, reviewed the FBI's investigative file, interviewed Ellen Meltzer, reviewed Meltzer's Recommendation to Decline Prosecution Memorandum, and asked the Civil Division for all records it had concerning the Hull loan matter. We found that the decision declining to prosecute Hull was not influenced by any pressure from the CIA or any other entity. The Fraud Section of the Criminal Division of the Department of Justice concluded that it did not have sufficient evidence to prosecute Hull, a decision which appears reasonable based upon our review.

4. Allegation that a DEA Agent helped Hull Flee Costa Rica

In January 1989, John Hull was indicted in Costa Rica on murder, narcotics, and "hostile acts" charges arising out of his alleged role in the 1985 bombing attempt on Eden Pastora's life, in which several journalists were killed. In July 1989, Hull fled to Haiti and then to the United States.

On May 17, 1991, Costa Rican journalist Jorge Valverde told Ronald E. Lard, then DEA's Country Attache in Costa Rica, that Hull had claimed to have received help from a DEA Special Agent in his escape from Costa Rica. This agent was stationed in Costa Rica at the time that Hull fled the country. Lard advised DEA's Office of Professional Responsibility (OPR) and the Charge d'Affaires at the United States Embassy in Costa Rica about the allegation.

Within a week of being informed of the allegations, DEA OPR initiated an investigation. According to OPR records, OPR Senior Inspector Anthony Ricevuto interviewed the accused agent on May 30, 1991. The accused agent stated that he had been introduced to Hull by an acquaintance and had thereafter spoken to Hull perhaps four or five times. The accused agent said that he did not know how Hull escaped from Costa Rica and signed a statement to that effect.

After learning from a private investigator working for a criminal defendant in an unrelated case that "a DEA contract pilot" had flown Hull from Costa Rica to another country, and learning from Lard that one of the accused agent's informants in Costa Rica, Harold Wires, was a pilot, Ricevuto interviewed Wires on July 23, 1991. Wires claimed the accused agent had given him between $500 and $700 to fly Hull in a Cessna aircraft to Haiti. There, they met Jorge Melendez, a pilot for the DEA in Costa Rica, who flew back to back to Costa Rica with Wires in the Cessna. Hull was flown to the United States by Ron Lippert who, according to Wires, was a close friend of the accused agent. According to Wires, he, Kornicki, Hull, Lippert, and Melendez had had breakfast together in Haiti, before going their separate ways. Wires said that he had not spoken to the accused agent since shortly after Hull's escape, when he and the accused agent had a "verbal disagreement."

Ricevuto confirmed that Jorge Melendez had been a DEA informant and a freelance pilot at the time of Hull's flight from Costa Rica. He then interviewed Melendez, who stated that he and Lippert had flown to Haiti on behalf of a private transportation company. After staying overnight in Haiti with Lippert, Wires and Kornicki, Melendez had returned to Costa Rica in the Cessna. Melendez said he had never seen Hull in Haiti, and had no idea whether Hull had flown to Haiti with Kornicki and Lippert.

Twenty days later, Inspector Ricevuto received a telephone call from Harold Wires and Bobby Kornicki, who both said that the accused agent had not known Hull was on the Cessna going to Haiti. The accused agent knew only that the Cessna was to return to Costa Rica after it had picked up Melendez. When Ricevuto noted that this account conflicted with Wires' earlier statements, Wires repeated that the accused agent had not known about the plan to help Hull flee. Wires explained that he had "set up" the plan because he had felt that the CIA had "abandoned" Hull in Costa Rica. At a subsequent interview on September 26, 1991, Wires stated that the accused agent had given him $700 to refuel the Cessna in Haiti for the flight back to Costa Rica. It was Lippert who had asked Wires to fly Hull from Costa Rica to Haiti. The accused agent had never asked Wires to do anything to assist Hull. He noted that Hull had recently called him, upset after having read an article by Martha Honey, alleging that the accused agent had been involved in Hull's flight. Wires signed a statement saying the accused agent "was never a part or ever had knowledge of" the plans for Hull's escape. Wires was asked to take a polygraph and stated that he would discuss it with his attorney. It does not appear that Wires was polygraphed regarding his statement.

Ricevuto interviewed Ron Lippert on August 9, 1991. Lippert stated that the accused agent had helped plan Hull's escape, a claim he reiterated during a second interview with Ricevuto on September 30, 1991. Lippert agreed to a polygraph examination, which DEA SA John Schuller administered immediately after the second interview. SA Schuller found that Lippert was "deceptive in his answers."

On September 26, 1991, OPR Inspector Sandalio Gonzalez received a telephone call from a man who identified himself as John Hull, who said he was calling because he had spoken to Gonzalez when Gonzalez was Assistant Country Attache in Costa Rica. Hull was very upset about the newspaper article written by Martha Honey and said "they are framing [the accused agent]." Hull added that he had proof that the accused agent had nothing to do with Hull's departure from Costa Rica. Hull asked who he could contact at the DEA to discuss the allegations against the accused agent. Gonzalez told Hull to contact Senior Inspector Ricevuto.

On October 7, 1991, Hull wrote Ricevuto a letter responding to questions Ricevuto had posed to Hull by telephone on October 4, 1991. In his letter, Hull wrote:

I have no close personal friendship, interest or animosity toward [the accused agent] . . . . The only people that know the truth about how I left Costa Rica are the pilots and myself . . . . I have no idea if [the accused agent] knew how and when I was leaving Costa Rica. I assumed the ambassador was fully aware of my intentions. However[,] I have no direct knowledge to verify this, and no way to know what was discussed between [the accused agent] at any time, anyplace or to anyone . . . . (Q) Did I ever pay money to [the accused agent?] (A) No. . . . Hopefully this will clear up your investigation and stop the injustices being carried out against [the accused agent].

DEA's Board of Professional Conduct reviewed all of the evidence and testimony collected by Senior Inspector Ricevuto. On January 15, 1992, the Board recommended that the accused agent be issued a letter of clearance. Although our review is limited and we did not reinterview the persons involved in the incident, the DEA file indicates that DEA OPR's conclusion was reasonable.

5. The Justice Department's Actions Regarding the Costa Rican Extradition Request

In 1991, the Justice Department received a request from the Costa Rican government to extradite Hull. To evaluate the Justice Department's handling of the Costa Rican government's request, the OIG reviewed the relevant DOJ file, interviewed the two attorneys who worked on the request, and obtained relevant documents from the State Department.

When a foreign country seeks to extradite someone from the United States, the Office of International Affairs (OIA) of DOJ's Criminal Division handles the country's request. Depending on the custom and practice of the requesting nation, the extradition request is either sent directly to OIA from that nation's counterpart to DOJ, or is forwarded to DOJ through the State Department. Costa Rica customarily sends extradition requests via the State Department. On May 13, 1991, the State Department forwarded to OIA the Costa Rican government's request for the extradition of John Hull.

Before OIA can bring an extradition petition to a judicial officer and seek an arrest warrant, it must ensure that the documentation provided by the requesting country complies with the requirements of a valid extradition treaty and satisfies the probable cause requirements of United States law. In addition, OIA will not bring an extradition petition for a foreign crime where there is no "reciprocal" (equivalent or analogous) offense in the United States. This is known as the "dual criminality requirement." According to OIA attorneys, if OIA finds irregularities or insufficiencies in the documents supplied by the requesting country, as it often does when a request is something other than a simple charge that is supported by overwhelming and clear evidence, there will be "a lot of back and forth" between OIA and the requesting country. Sometimes OIA will deal with a foreign government directly. However, in Costa Rican matters (as with those of many other countries), the OIA will make its requests for additional information through the State Department.

OIA attorney Lystra Blake told us that Costa Rica's request for the extradition of John Hull presented a complex case with unusual charges: an offense under the Costa Rican "Hostile Acts" law; a charge that Hull had committed premeditated murder and attempted murder in connection with the La Penca bombing aimed at assassinating Eden Pastora; and an "international narcotics trafficking" charge.

The drug charges were based on informant information that Hull was allowing his ranch to be used by pilots affiliated with the Contras and that they used the ranch as a transfer point for drugs that were later flown into the United States. While the files are not clear on this matter, Costa Rican authorities appear to have based their allegations on evidence that Hull purchased a much larger quantity of gasoline than his small airplane would have used; Hull's contact with known drug trafficker Jorge Morales, who was in prison at the time; and informant information that, on at least three occasions between 1983 and 1985, planes carrying arms allegedly intended for use by the Contras landed on airfields owned by Hull, and allegedly were refueled and loaded with drugs for transportation to the United States with the knowledge of Hull. The other charges were based on allegations that Hull had some involvement in the plot to assassinate Eden Pastora.

OIA concluded that the documentation and evidence supporting the Costa Rica extradition request was inadequate. Over the next three years, OIA made many requests to Costa Rica for further documentation, for translations of various information, and for more information about the charges brought against Hull in Costa Rica -- information both about the substantive laws under which Hull was being charged and the facts on which the Costa Rican government was relying as a basis for those charges. OIA attorney Kevin Smith -- now assigned to the Hull matter -- told the OIG that this sort of protracted process is not unusual for Costa Rican extradition requests.

In March 1993, Costa Rica submitted a renewed request for Hull's extradition which contained documents indicating that the Superior court in Costa Rica had dismissed the drug trafficking charge against Hull for lack of evidence and that his extradition was no longer sought for that offense. This left the "Hostile Acts" and murder charges against Hull. However, on reviewing the documentation supporting the murder charge, based on Hull's alleged involvement in the La Penca bombing, the OIA found no evidence of Hull's involvement in this crime, indeed no evidence that he even knew about the bombing before it occurred. Accordingly, OIA attorney Lystra Blake, who handled the Hull extradition matter from its inception through May 1996, responded to the renewed request for extradition in a letter dated August 2, 1994, informing Robert Harris at the State Department that, although the revised documents submitted with Costa Rica's most recent request responded to a number of deficiencies in the original request, OIA found that they were still "not sufficient for presentation in a United States court." Blake noted in her August 1994 letter:

It is possible that [the Hostile Acts] statute is similar to the United States' Neutrality laws and therefore satisfies the dual criminality requirement. However, even if hostile acts satisfies the dual criminality requirement, this offense, by definition, may fall within the political offense exception of Article 4 of the [extradition treaty between the United States and Costa Rica]. We are looking into the matter to determine if hostile acts may be considered an extraditable offense. If it is, the documents are sufficient to seek Mr. Hull's extradition for this offense.

Blake also stated in her letter that the revised documents did not establish any probable cause on the issue of murder or attempted qualified murder. The letter stated that DOJ had found that the facts presented failed to show that Hull knew about the La Penca bombing before it occurred or that he participated in it. Blake asked that OIA's comments be forwarded to the government of Costa Rica.

When we asked Blake if OIA had, in fact, determined whether the Hostile Acts charge satisfied the dual criminality requirement and, if so, whether it fell within the political offense exception to the treaty, Blake explained that she had regarded this paragraph of her letter as an invitation to the Costa Rican government to inform OIA as to whether the Costa Rican government wanted to proceed with an attempt at extradition on the Hostile Acts charge, especially in light of information OIA had received indicating that the statute of limitations on the Hostile Acts charges may have run in Costa Rica. This account is supported by a cable, dated January 10, 1994, from the American Embassy in Costa Rica to the State Department and Lystra Blake. This cable described a meeting between Embassy personnel and John Hull's Costa Rican attorney, Yelba Mairena, in which Mairena informed the Embassy that the statute of limitations under Costa Rican law was about to run out on the Hostile Acts charge pending against Hull.

Blake recalled that she had orally advised State Department employee Robert Harris that she needed to know whether the Costa Rican government wanted to proceed on the Hostile Acts charge. But the Costa Rican government made no effort to move forward. Blake noted that conversations that she had with representatives (whose names she cannot recall) from the Costa Rican government after her August 1994 letter made clear that the Costa Rican government was not interested in pursuing the Hostile Acts charge. Indeed, Blake believed that the Costa Rican government was not genuinely interested in pursuing any aspect of Hull's extradition: "Costa Rica was really not pushing it, the officials talked a good talk" but were not forthcoming with documents and information.

Blake's belief that the Costa Rican government was not genuinely interested in pursuing Hull's extradition is supported by a cable the American Embassy in Costa Rica sent to the Secretary of State, the Ambassador to the United Nations, and several American embassies on October 10, 1990, before the Costa Rican government officially requested Hull's extradition. The cable recorded a meeting at the American Embassy in Costa Rica with Costa Rican President Roberto Calderon, and noted:

Another matter he wanted to bring to our attention, Calderon said, is the forthcoming Costa Rican request to extradite John Hull from the United States. . . . His government has no interest in extraditing John Hull. Hull is a personal friend, whom he respects and the executive branch has no interest in prosecuting him. Under Costa Rican law, however, the decision to request extradition is the responsibility and prerogative of the judicial branch. The executive is required to act as the judiciary's agent and has no discretion. Thus, when the voluminous request (of some 3,000 pages) is finally translated, the request will go forward.

A "comment" by the cable's author interprets Calderon's statement as meaning that "On Hull, Calderon is putting us on notice that there's no way he can turn a request off but is clearly hoping that Hull will not be extradited."

In sum, we found no evidence that OIA departed from the treaty requirements with Costa Rica, United States law, or its own procedures in handling the Hull extradition request. The matter was not pursued because Costa Rica dropped the drug charges, OIA found that the murder charges were not supported by probable cause, and the Costa Rican government did not pursue the "Hostile Acts" charge. Moreover, there is no evidence that this decision was influenced by any outside agency or was based on any improper motivation.

I. Jose Orlando Bolanos

As discussed in the introduction of the report, the CIA reported to the State Department in January 1987 that an individual named Jose Orlando Bolanos had met with undercover DEA and FBI agents in January 1982, claiming to be the leader of an anti-Communist movement in Nicaragua called the "Internal Front." Bolanos allegedly laid out a plan to the undercover agents to import cocaine into the United States and requested money for expenses to do so. According to the report, Bolanos later refused to accept the money and the plan was never implemented. The OIG examined DOJ files to gain additional details about the allegation.

Bolanos is a Nicaraguan national who was raised in the United States. He returned to Nicaragua and began a developmental relationship with the CIA in 1979, which ended shortly thereafter when the Somoza regime was ousted. Bolanos maintained an informal relationship with a CIA case officer in South America. According to the CIA OIG, Bolanos maintained the relationship on his own initiative. Bolanos told the case officer that he was acting as a fundraiser for the Contra group UDN.

In 1982, undercover DEA agents met with Bolanos in Florida. According to a DEA report, Bolanos told the agents that he was the "Commander-in-Chief of the partisan army in Nicaragua . . . . He stated that he had trained an army with the help of the Argentine military and was planning the overthrow of the communist regime in Nicaragua." Bolanos also told the agents he could obtain 1,000 kilograms of cocaine from the Secretary to the Minister of the Interior in Bolivia. According to the DEA agents, Bolanos agreed to sell up to 1,000 kilos of cocaine to them and "receive the profits of the first 100 kilograms and use the profits to subsidize his military venture in South America."

At the same time that he was meeting with the DEA undercover agents, Bolanos was also negotiating for the sale of 1,000 kilos of cocaine to FBI undercover agents through another narcotics trafficker. Bolanos told the FBI agents that he was affiliated with an anti-Communist organization in Nicaragua and had turned to drug trafficking to try to raise money to fight the Sandinista regime.

The DEA and FBI began to coordinate a joint investigation of Bolanos in January 1987. Bolanos eventually backed out of the planned deal because of his dissatisfaction with the arrangements for payment and the refusal of the undercover agents to give him money up front for expenses. The joint investigation ended in February 1982. According to a DEA report dated June 22, 1982, the DEA planned to proceed with the investigation of Bolanos but when Bolanos was arrested in Nicaragua for his efforts to overthrow the Sandinista regime in June 1982, the DEA closed its investigation.

CIA OIG told the OIG that the CIA case officer with whom Bolanos maintained contact was aware that Bolanos was planning to participate in a large scale drug transaction. According to the CIA OIG, Bolanos told the case officer that he planned to steal from the dealers and turn them into the DEA. There is no record that the CIA reported this information to the DEA.

In late 1986, one of Bolanos' drug associates was indicted on drug charges and pled guilty. At the time of his plea, he implicated Bolanos in drug trafficking and described Bolanos' anti-Sandinista activities. The FBI learned that Bolanos was back in the United States and requested that the USAO in the Northern District of Florida, indict Bolanos. The USAO declined prosecution.

It appears that in 1986, the Bolanos case came to the attention of Criminal Division Deputy Assistant Attorney General Mark Richard, who personally reviewed the matter with the Chief of the Narcotics and Dangerous Drug Section (NDDS), Charles Saphos, after DOJ sent out inquiries regarding Contras and drugs in response to Congressional inquiries. According to a NDDS memorandum, NDDS reviewed the matter and concluded that the case against Bolanos was weak: "Due to the lack of proof of apparent ability to produce the cocaine in question, coupled with the age of this case, prosecution is not recommended."

Mark Richard's handwritten notes of a meeting with an AUSA from the Northern District of Florida, indicate that Richard concurred with the assessment that the case was weak and recorded in his notes that the AUSA had told him that the government "may have another case against Bolanos." Richard recorded that he "told AUSA to go forward with strong case if he so desires -- Keep us advised . . . . Told [the AUSA] to handle matter as they normally would."

The OIG concluded that DOJ handled the Bolanos matter appropriately. The DEA and FBI both pursued the initial investigation of Bolanos, and the decision by the U.S. Attorney's Office not to prosecute Bolanos was based, not on the fact that he was a Contra, but rather on its assessment of the strength of the evidence.

84. SA Gonzalez told the OIG that he spoke to Hull once. After a spate of unfavorable publicity in Costa Rica about Hull, including allegations of drug trafficking, Hull contacted DEA's Costa Rica office and was referred to Gonzalez. Hull invited the DEA to search his ranch for any evidence of narcotics trafficking. Gonzalez told the OIG that he declined. Gonzalez stated that he considered Hull's invitation to be completely self-serving and that if Hull were involved in drug trafficking, he would certainly remove all evidence of it before inviting the DEA to search his property.


(December, 1997)
Office of the Inspector General
Department of Justice