Dead End

Courtesy Costa Mesa Police Dept.The San Jose Mercury News published a three-part series in August 1996 in which reporter Gary Webb connected the CIA to California's crack-cocaine epidemic of the 1980s. Several months later, Webb's editors published a retraction of his Dark Alliance stories. Webb quit the paper soon thereafter. Last December, he committed suicide.

According to the Los Angeles Times' Dec. 12 obituary, "Major newspapers, including the Los Angeles Times, New York Times and Washington Post, wrote reports discrediting elements of Webb's reporting."

End of story? Well, if so, why is the FBI still citing concerns over U.S. national security in its refusal to hand over documents from its 1985 investigation of a key player in the drug ring Webb wrote about: convicted drug dealer, international arms dealer and ex-Laguna Beach cop Ronald Lister?

A Jan. 31, 2005, letter from Richard Huff, co-director of the U.S. Justice Department's Office of Information and Privacy, to the Weekly's law firm, Davis, Wright & Tremaine, states that "some of the information responsive to your client's request is classified." Huff affirmed the FBI's refusal to release uncensored copies of its files on Lister but said the decision would be referred to the agency's Department Review Committee "so that it may determine if this information should remain classified."

In his Dark Alliance series, Webb reported that Lister claimed to work for the CIA when cops raided his home for drugs in October 1986, a statement the mainstream media dismissed as a desperate attempt by a "con artist" to escape punishment for his drug dealing. But during that raid, cops uncovered a heap of documents supporting Lister's claim. Among them were a 1982 proposal by Lister's Newport Beach-based security firm to provide security to El Salvador's Ministry of Defense and a list of business contacts that included Salvadoran death-squad founder Roberto D'Aubuisson and Bill Nelson, then-vice president of security for the Irvine-based construction giant Fluor Corp.

According to a 1998 U.S. Justice Department Office of the Inspector General report, the FBI investigated Lister five times in the mid-1980s. One probe involved the alleged sale of missiles to Iran. Another centered on the illegal transfer of weapons between Saudi Arabia and El Salvador. In a third investigation, Lister testified for the FBI about a covert-arms pipeline allegedly directed by Iran-contra co-conspirators Richard Secord and Oliver North. The FBI claims it dropped those investigations because it could find no evidence Lister ever worked for North or the CIA (see "Crack Cop," July 13, 2001).

Eight years ago, the Weekly requested documents from both the FBI and CIA concerning Lister's relationship to Nelson, whose previous job was deputy director of operations for the CIA. Nelson had retired from the agency in 1976 amid a congressional investigation into the CIA's controversial forays into Chile and Angola—clandestine operations Nelson supervised from his office at the CIA's Langley, Virginia, headquarters. The CIA responded by saying it could locate no records responsive to that request.

But in 2001, the FBI handed over several pages of heavily censored records from its 1985 investigation of Lister's activities in El Salvador. They showed that Nelson met Lister in 1978, just two years after Nelson left the CIA and while Lister was still a Laguna Beach police detective. How they met is unclear, thanks to government censors. But the documents revealed Nelson and Lister did business together for the next eight years, a period when Lister was both smuggling cocaine into the U.S. and running down to El Salvador to meet with the likes of D'Aubuisson.

In a 1996 interview with Webb, Christopher Moore, an employee of Lister's, said Lister had "a big CIA contact" at an Orange County company who would help protect Lister and his employees in El Salvador. "I can't remember his name, but Ron was always running off to a meeting with him, supposedly," Moore told Webb. "Ron said the guy was the former deputy director of operations or something, real high up there. All I know is that this supposed contact of his was working at the Fluor Corp. because I had to call Ron out there a couple of times."

During that time, FBI agents investigated Lister's possible involvement in drug trafficking when the bureau learned Lister had purchased his Mission Viejo home for $374,000—in cash. Simultaneously, the heavily censored memos released to the Weekly show the FBI was interviewing Lister about his Central American arms deals—an investigation that led straight to Nelson. The memos reveal that while Lister was testifying to a federal grand jury about that activity, Nelson was coaching him about what to say.

"He [Lister] then told of his meeting with the FBI and that he had been subpoenaed before the grand jury in San Francisco," one of the memos 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."

Citing U.S. national security, the FBI censored the next three lines of Nelson's statement. But strikingly—given the CIA's repeated assertion that Lister had absolutely no ties to the agency—the FBI memo reveals that, in an effort to aid Lister, Nelson telephoned at least one other former CIA agent. "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."