Crack Cop

FBI documents link an ex-Laguna cop and drug runner to an Irvine executive with ties to the CIA

Even as the FBI investigated Lister on weapons export charges, narcotics agents were zeroing in on the Blandon-Lister-Ross network. A separate FBI report from the same period shows that while its agents were interviewing Nelson, they were also investigating Lister's purchase of a Mission Viejo home for $374,000 in cash.

The FBI memo also shows that while the bureau was investigating Lister, Nelson had been coaching him on his upcoming grand-jury testimony. "He [Lister] then told of his meeting with the FBI and that he had been subpoenaed before the grand jury in San Francisco," the FBI memo states. "He told Nelson he was terrified. Nelson said go. . . . [Lister] admitted being stupid and that he had done a dumb thing. Nelson said [Lister] left and then called back after his grand-jury appearance and said he really did well."

Whatever else Lister told Nelson about his testimony is a mystery because the FBI censored the next three lines, again citing national security considerations.

The FBI memo reveals that, seeking to help Lister in his trouble with the FBI, Nelson made telephone calls to at least one other former CIA agent, a strange action assuming the CIA never had any relationship to Lister. "Nelson told [Lister] no one could help him, including the CIA," the memo states. "Nelson told [Lister] he had discussed his problem with another retired CIA agent and that no one could help him until he cleared himself with the FBI. Nelson said he told [Lister] he no longer cared to continue their relationship and he has not heard from him since."

Nelson described Lister as a "blowhard" and a "name dropper who always had a get-rich scheme." He added that Lister "did have some good ideas, such as a laser-sighting device, but could never get it off the ground. [Nelson] knew of no intelligence activities by [Lister]."

That last claim was—and is—clearly disingenuous. First, the source of the claim is a retired CIA official who admitted he spoke with other former agents on Lister's behalf while the latter was being investigated by the FBI. Second, whatever Lister and Nelson were up to in the 1980s, it is important enough to remain classified as "vital to U.S. national security" today, nearly two decades later.


Nelson retired from Fluor in 1985. Within a year, Lister was in deep trouble. Although the FBI never prosecuted him for his international arms sales, his drug dealing finally caught up with him in October 1986. After spending months on the case, a multi-agency narcotics unit led by LA County sheriff's detectives raided dozens of houses and apartments belonging to various members of the Blandon-Lister-Ross drug ring—including Lister's mountain retreat in Crestline, which police suspected was a drug warehouse.

Police also raided Lister's Mission Viejo home. They found him there, unshaven, still drinking his morning coffee. Because both of Lister's properties were clean, police suspected he had been tipped off about the raid. Clad only in a bathrobe and looking wild-eyed, Lister boasted that he knew he was being watched by police and claimed that he did business in South America and worked for the CIA.

Inside his house, detectives found what might have seemed evidence to support that assertion: military training films, photos of Lister posing with Nicaraguan contras, an array of sophisticated surveillance gear, a copy of the 1982 Pyramid contract—even his notes listing Nelson and D'Aubuisson as business contacts. All that, but no drugs. Lister wasn't arrested. Just days later, most of the paperwork seized from Lister's home mysteriously disappeared from the LA Sheriff's Department evidence room.

Unperturbed, Lister continued to deal drugs. In 1988, he tried to sell two kilos of cocaine to a prostitute he met at a Newport Beach boat party. The woman turned out to be a Costa Mesa police informant, and Lister ended up behind bars for the first time since he began dealing drugs with the contras. Two kilos was enough to land Lister in prison for years; instead, he walked out of jail after only two days. Having signed a deal with the Orange County district attorney's office, Lister had become a narc.

But his new career as an informant was short-lived. The following year, DEA agents arrested Lister again, this time in connection with a San Diego-area cocaine distribution ring. Two years later, a jury convicted Lister on drug-trafficking charges; he was sentenced to 97 months in prison and 60 months of probation. Lister appealed, asserting that while an informant, he had testified before two federal grand juries about a "major Central American cartel" and his "activities in Central America concerning certain key figures from Nicaragua alleged to have been involved in the Iran-contra scandal."

In establishing grounds for a softer sentence, Lister told the court he had certainly run drugs, but he had also cooperated with the government. He claimed he gave prosecutors thousands of pages of documents and notes regarding his work for the CIA "from 1982 to 1986 and beyond, and I did it in detail, location, activity," he said. "I gave them physical evidence, phone bills, travel tickets, everything possible back from those days—which most people don't keep, but I do keep good records—to assist them in this investigation. They were excited about it."

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