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Norwin Meneses - Magda Hassan - 17-07-2009
Chapter III: Norwin Meneses
A. Introduction
Norwin Meneses conducted large-scale drug trafficking in Nicaragua and the United States for many years. He was the subject of various criminal investigations in Nicaragua, before and after the overthrow of the Somoza regime in 1979, and also in the United States. Within the United States, the DEA began the first federal investigations of him in the early 1980s, which resulted in the prosecution of several of his family members and associates, but not him. As we discussed extensively in the previous section, starting in 1986 Meneses was used as an informant by the Costa Rica DEA office at the same time other DEA and FBI offices were still investigating him for drug trafficking in the United States.
In 1989, a grand jury in San Francisco indicted Meneses in a case based on his drug trafficking activities in 1984 and 1985. No cocaine was seized and the case relied on the testimony of cooperating witnesses. The indictment was sealed, and a warrant was issued for his arrest. Because he was no longer living in the United States, he was never arrested on this warrant. In 1991, however, Nicaraguan authorities arrested him in Managua and charged him with attempting to transport over 760 kilograms of cocaine to the United States. He was convicted on this charge and began serving a 25-year sentence in a Nicaraguan prison. The U.S. Embassy in Nicaragua has informed the OIG that Meneses was released from prison on November 14, 1997.
It has been suggested that Meneses was not prosecuted in the United States because of the influence of the CIA. The San Jose Mercury News articles reported that Meneses "never spent a day in a U.S. prison," despite the fact that he lived openly in San Francisco for many years and that the United States government was aware of his cocaine dealings for a long time. The articles claimed that investigations of Meneses "were stymied not by the elusive Meneses but by agencies of the U.S. government," suggesting the influence of the CIA or unnamed "national security" interests. The articles stated, for example, that in 1981 a San Francisco DEA agent named Sandra Smith investigated Meneses and "inadvertently uncovered the first direct link between cocaine and the secret army the Central Intelligence Agency was assembling to overthrow the government of Nicaragua," and that Smith's investigation was allegedly halted for reasons that were "not clear." The articles also claimed that the 1989 indictment of Meneses was "quickly locked away in the vaults of the San Francisco courthouse," inexplicably kept secret for many years, and his arrest warrant was never entered into a national law enforcement database.
This section of the report examines the federal investigations of Meneses in light of these claims. It first discusses the information in federal files about Meneses' criminal activities in the late 70s, then the investigations of Meneses in the early 1980s, including Smith's investigations. We describe his use as an informant by the DEA in the 1980s, his indictment in San Francisco in 1989, and his subsequent arrest in Nicaragua. Based upon our review, we found that the federal investigations of Meneses failed for several reasons, most notably because of coordination problems between the various law enforcement offices involved and vacillation by these offices as to whether he should be considered an informant or a target. But we found no interference with any investigation or prosecution of Meneses by the CIA or any other entity.
B. Background of Meneses
Norwin Meneses was born in Nicaragua on June 21, 1943. He came from a prominent Nicaraguan family that had close political connections to the Somoza government. One brother was reported to be the chief of police in Managua in the 1970s, another brother was a Nicaraguan general, and an uncle was reportedly the highest official in the Nicaraguan Customs Service. Meneses was very wealthy and reportedly owned a mansion in Nicaragua, a farm north of Managua, and other properties that he used in his criminal activities. Meneses also moved back and forth between countries, living in the San Francisco area off and on beginning in the 1960s. He reportedly owned several properties in San Francisco as well.
From contemporaneous reports, source information, and our interviews of some of Meneses' associates, it is clear that Meneses ran large cocaine smuggling and drug trafficking operations, both in Nicaragua and the United States, beginning in the 1970s. Information in FBI and DEA files indicate that he began trafficking before 1979, when the Sandinistas took power, and he continued these activities after they took control of Nicaragua. In the early 1980s, he attended Contra meetings in San Francisco, and gave some contributions to the Contra cause, occasionally calling himself a "revolutionary" who was fighting to get his country back. However, based on our interviews and review of DOJ files, we did not find evidence that he contributed a significant amount of his profits to the Contras or was a significant backer of that cause. Rather, he appeared to have established contacts and dealt drugs with all sides in the Contra war -- including the Sandinista government. Several people familiar with him and his organization said "he lacked any political allegiance and would deal with anyone who would provide cocaine at the lowest price" or that he "played both sides." Other sources reported that Meneses' motivation was money and that any of his associations with the Contras or the Sandinistas were not politically motivated but were strictly for financial profit.
In April 1997, we interviewed Meneses in a Nicaraguan prison. That interview, conducted in the presence of his Nicaraguan attorney, did not shed much light on his activities. During the interview, Meneses said he gave small amounts of money to the Contras, but he also falsely denied ever being a drug dealer. He claimed that he was "set up" on the charges in Nicaragua, and he denied ever cooperating with any entity of the United States government.
Yet, despite his denials, information in DOJ files makes clear he was a long-time drug trafficker who later became a DEA informant. According to a DEA agent who handled Meneses as an informant and another informant who worked with Meneses, Meneses admitted to both that he was a drug trafficker. As of October 1996, the DEA's NADDIS database referred to Meneses 53 times, mostly in cases involving other people in which source information mentioned Meneses peripherally.(28) However, including the Los Angeles OCDETF case described in the previous chapter, the DEA had eight cases, beginning in 1981, in which Meneses was one of the main targets. In addition to these DEA cases, during the mid-1980s the FBI targeted Meneses, and Meneses was ultimately indicted in 1989. At the time of his indictment, he was also an informant working with the DEA in Costa Rica.
We now describe the first cases in which Meneses was targeted by the federal authorities, along with the results of those investigations.
C. First reports on Meneses
The first report concerning Meneses that we located in DOJ files was a 1968 foreign police cooperation request from the Nicaraguan authorities for information on Meneses. The Nicaraguans suspected that Meneses was involved in the murder of a "money changer" in Managua and that he had fled to San Francisco. Through the CIA, the Nicaraguans requested that the FBI provide police records from San Francisco relating to Meneses. When transmitting this request, the CIA stated that it had no information on Meneses. In response, the FBI collected Meneses' arrest and conviction records in San Francisco and forwarded them to Nicaragua. Meneses' San Francisco record included convictions for shoplifting in 1963, misuse of slot machines in 1964, and statutory rape of a female under 18 years old in 1964.
In 1976, the Inspector General of Customs in Managua, Nicaragua, reported to the FBI that Meneses was suspected of running a car theft operation in California and New York and transporting the stolen cars to Nicaragua. The FBI provided information on the stolen cars in question to the authorities in Managua. According to a later 1976 FBI report, Meneses was arrested in Nicaragua for these thefts but then released.
In 1979, the FBI Legal Attache (Legat) in Mexico City suggested that Meneses be considered for inclusion in the FBI "top thief" program because of his suspected car theft operation. The FBI Legat also suggested that an arrest warrant be issued for Meneses "if for no other reason than to preclude him from entering the United States," and that a "stop with the INS" be placed on Meneses so that he could be interviewed regarding his activities if he tried to come to the United States. But a memorandum from the Special Agent in Charge of the San Francisco FBI office stated that an Assistant U.S. Attorney there declined prosecution of Meneses for the car thefts and no arrest warrant could be obtained, and therefore an INS stop without an arrest warrant would be ineffective. The memorandum reported that although Meneses' whereabouts were then unknown, he had "sanctuary" in Nicaragua, where he had eluded prosecution because of his political connections. The memorandum said that further investigation in this case would not be productive and the matter was closed.
During this time, other information was reported to various DEA offices concerning Meneses' drug trafficking in Nicaragua. For example, in a 1976 DEA report from Costa Rica, a DEA special agent reported intelligence that Meneses was allegedly the source of supply for several persons smuggling cocaine from Managua to San Francisco. In 1978, the DEA received intelligence information that Meneses might be smuggling cocaine into the United States concealed in automobiles or on airlines. In 1980, the DEA investigated a drug trafficking network in New Orleans, and Meneses was said to be the Nicaraguan source of supply for the organization.
D. DEA Investigations of Meneses, 1980-1986
Between 1980 and 1986, the DEA in San Francisco opened several investigations of Meneses and his associates. While some of Meneses' relatives and associates were convicted of drug trafficking as a result of these investigations, Meneses was not. This section describes those investigations, including one that the San Jose Mercury News claimed was inexplicably halted.
1. Smith's investigations
Sandra Smith, an agent in the DEA's San Francisco office from 1974 to 1984, told the OIG that she first heard about Meneses' drug trafficking organization in 1975. She said that she heard rumors that he was transporting guns to Nicaragua and importing drugs from there. In the late 1970s and early 1980s, she was assigned primarily to work on several major cases targeting the Hells Angels motorcycle gang in the San Francisco area. In one of those cases, she overhead a taped conversation in which Meneses discussed drug trafficking.
In 1980, Smith learned additional information about Meneses' organization. DEA intelligence sources reported that Meneses' organization based in the San Francisco Bay area was importing 10- to 20-kilogram shipments of high-quality cocaine from Colombia, via Meneses' Nicaragua-based organization. His nephews, Jaime and Roger Meneses, allegedly distributed the cocaine in California.
In July 1980, Smith opened her first case on the Meneses organization. In this case, she assisted on a state search warrant that the local police obtained and executed on Roger Meneses' house in San Francisco. During the search, 20 pounds of cocaine and $8,800 were seized. The local police arrested Roger Meneses and charged him with state narcotics offenses. The charges were later dismissed because the search warrant had been based on an illegal traffic stop.
In September 1981, Smith opened a second case against the Meneses organization. In this case, Smith was contacted by police detectives in Baldwin Park, which is located near Los Angeles, who said that a confidential informant had reported that Julio Bermudez, a large volume cocaine dealer in the Los Angeles area, traveled regularly to San Francisco to obtain cocaine from Norwin Meneses' organization. Through telephone records, the Baldwin Park police had determined that Bermudez regularly called a telephone number in the San Francisco area that was listed to Jairo Meneses, another nephew of Norwin Meneses.
On November 12, 1981, Smith and local police in Los Angeles and San Francisco conducted a surveillance on Bermudez. Bermudez flew from Los Angeles to San Francisco carrying a small suitcase, then drove to a residence in Dale City that belonged to Carlos Cabezas.(29) Bermudez later drove to Jairo Meneses' house and returned the same night to Los Angeles.
On November 14, 1981, Los Angeles police executed a search warrant on Bermudez's house and seized $12,000, approximately three pounds of cocaine, and a ledger containing the notation "11-11 90,000 to Jairo." Bermudez was arrested, and he told the police that he had received the seized drugs from Norwin Meneses.
On November 16, 1981, Smith, DEA Agent William Ruzzamenti, and several other San Francisco DEA agents assisted local police in the execution of a state search warrant on Jairo Meneses' house in San Francisco. The agents seized $9,000 in cash, miscellaneous papers, ledgers that appeared to relate to drug transactions, and 24 "Thai sticks," suspected to be marijuana. Jairo Meneses was arrested but was released from custody the next day when prosecution was declined by San Francisco Assistant U.S. Attorney Eric Swenson because no narcotics were found. Smith kept her case open until 1983, when it was closed after the seized cash was civilly forfeited.
In May 1982, Smith opened a third case relating to the Meneses organization, which involved another local police search warrant. The local police had received information that Roger Meneses stored cocaine in his house in San Bruno. On May 14, 1982, the local police, assisted by Smith, executed a search warrant on this house and seized guns, ammunition, $5,000 in currency, and a small amount of marijuana. Roger Meneses pled no contest to possession of marijuana and received a suspended sentence.
Smith's fourth case was opened in January 1983, based on information from a source who said that he had purchased cocaine from Ernesto Meneses, who was the brother of Norwin Meneses. After this initial source information, however, no further evidence was developed and the case was later closed.
Throughout this time period, several other DEA offices in the United States and elsewhere received intelligence information in other cases that mentioned Norwin Meneses. For example, in 1981 an informant in Guatemala City reported to the DEA that Meneses had been a large-scale drug trafficker for at least ten years in Nicaragua. In 1981, the Guatemala City DEA office debriefed another informant regarding a cocaine trafficking group in San Francisco, and the informant mentioned Meneses as a secondary source of supply for this group. In a 1981 report, the DEA Costa Rica office discussed a major narcotics trafficker in Costa Rica; Meneses was said to be a courier for this trafficker. In 1982, the DEA office in New Orleans reported that a source had stated that Meneses imported cocaine into the United States in lumber shipments from Ecuador.
In addition to the DEA, other federal law enforcement agencies during this time received information about the Meneses organization's activities. For example, in 1982, a source told the FBI that Meneses was associating with known drug dealers and had a reputation as a hit man who had killed in Nicaragua. Another FBI source reported that Meneses was involved in the weapons business and had used automobiles to import cocaine into the United States. This source said that Meneses had purchased a large farm in Costa Rica and planned to establish his narcotics business there.
In 1983, the IRS attempted to pursue a "net worth tax case" against Meneses. But the IRS reported that it was able to develop significant income for only one year and was unable to develop a starting point for Meneses' wealth, because Meneses was from Nicaragua and "could easily use a `cash horde' defense."(30) In 1983, the San Francisco United States Attorney's Office declined prosecution in the tax case because of weak or insufficient evidence, and the IRS concurred with this decision.
2. Allegation that Smith's investigations of Meneses were inexplicably halted
In the San Jose Mercury News articles, Smith is quoted as stating that she thought her investigation into the Meneses organization was "really big," but that it was terminated shortly after she had followed Bermudez to Carlos Cabezas' house in Dale City in 1981. The articles reported that her enthusiasm for the case against Meneses was not shared by her DEA supervisors, who took her off the case to investigate motorcycle gangs. The article said that the reasons her investigation was halted were "not clear," but the articles implied that it was because she had stumbled onto a link between cocaine and the CIA's "secret Contra army."
We interviewed Smith about her investigations and her statements in these articles. She said that she was the first female agent in the DEA's San Francisco office, working there from 1974 until October 1982, when she went on maternity leave for a short time. In 1983, she became pregnant again and took maternity leave in the spring of 1984. She left the DEA permanently in December 1984.
Smith told us that the San Jose Mercury News articles "left certain things out" that she had said concerning the reasons she thought her investigations of the Meneses organization did not go anywhere. She told us that she believed that any investigation into the Meneses organization would have been a large and complex one and would require a task force approach to be successful. She said she tried to talk her supervisor into letting her run such a task force case against Meneses. Her supervisor spoke to the lead agent on the Hell's Angels case to which she was then assigned, but that agent said he needed Smith on the case. As a result, her request to work a task force matter against the Meneses organization was turned down. She said that she later spoke to another supervisor, who agreed that the Meneses case was big enough to require a task force approach, but he said that he did not have anyone who could run it. Smith suggested that she could do it, but the supervisor rejected her offer.
Smith told us that she did not think there was any "conspiracy" within DEA not to investigate Meneses or that the CIA or any other entity pressured the DEA not to pursue him. Rather, she thought that her efforts to organize a task force case against Meneses were rejected because of sexism and the low status of women in the DEA. She believes that if one of the male agents had suggested leading a task force in the Meneses case, as she had, her supervisors would have taken it more seriously. She said this attitude was demonstrated when, at a later time, an informant with information on the Meneses family was given to John Rotunno, another DEA agent, rather than to her, and Rotunno was allowed to work that case.
We attempted to interview Smith's supervisors about this claim, but were only able to interview one who is still with the DEA, Saverio Weidl. He supervised Smith in the San Francisco DEA office from 1981 until she left the DEA in 1984. He said that during that time, much of the San Francisco DEA office, and all of his group, including Smith, worked on the Hell's Angels case. He could not recall Smith ever approaching him to lead a task force against Meneses. He denied that she was treated any differently from the male agents and said she never complained to him about any disparate treatment.
Smith said that when she left the DEA, she asked Rotunno if he wanted her personal notes and files on the Meneses organization. According to Smith, Rotunno said that he did not. As a result, Smith shredded them, although the official case files were retained. Later, Rotunno called her and asked for her personal files, but they had already been destroyed.
We interviewed DEA agent John Rotunno about the investigation of Meneses. Rotunno worked for the DEA in San Francisco from 1983 until December 1986, when he joined the Bureau of Alcohol Tobacco and Firearms (ATF). Rotunno said that he handled several cases on the Meneses organization, based on informants to whom he was introduced by the San Francisco police and others. As we describe below, these informants made undercover buys from the Meneses organization, resulting in the arrest of nine members of the group, including Roger Meneses and Jairo Meneses.
Rotunno told us that when he first came to the San Francisco DEA in 1983, Sandra Smith had collected substantial information on the Meneses organization and had "chased leads," but she had no informants who could infiltrate the organization or buy any drugs to make a case. Rotunno said Smith "dropped from sight" in the middle of the investigation of Meneses because of her pregnancy leave. Rotunno said he read all the information that Smith had gathered on the Meneses organization, and that Smith gave him three to four files filled with material. He did not remember Smith ever telling him that she had destroyed anything. He also said he was not interfered with during his investigations by the CIA or any other national security entity.
In short, whatever the reason that Smith did not get to work full time on the Meneses case, we did not find that her investigation was improperly halted or that the CIA or any other entity interfered with it.
3. More DEA investigations of the Meneses organization
In 1983 and 1984, first with the assistance of Smith and then after Smith left the DEA, Rotunno pursued several cases against the Meneses organization in San Francisco. In October 1983, Rotunno opened his first case against the Meneses organization after Rotunno, Smith, and the San Francisco police interviewed an informant who had previously sold cocaine for the organization. The informant identified Roger Meneses, Jairo Meneses, and other family members as cocaine traffickers for the group. Between November 1983 and January 1984, Rotunno and other DEA agents conducted an extensive investigation, making several undercover drug purchases from members of the organization, taping telephone conversations, and seizing records and property pursuant to search warrants. Beginning in February 1984, nine people were arrested and convicted of distribution of a controlled substance, including Roger Meneses, who received a six-year sentence. Rotunno told us that after Roger Meneses was sentenced, he offered to cooperate with the DEA, but the Assistant U.S. Attorney handling the case refused to have him released from prison for this purpose.
In January 1984, Rotunno opened a second case on the Meneses organization, based on another informant's report that he had met with Norwin and Jairo Meneses about their drug trafficking operations. According to the informant, Norwin Meneses asked the informant to run his organization in San Francisco because Norwin Meneses was upset with the way that Jairo Meneses was managing it. In Rotunno's case initiation report, he wrote that efforts would be made through the use of the informant to prosecute Norwin and Jairo Meneses.
Between May 1984 and November 1984, Rotunno's informant introduced undercover DEA officers to various members of the Meneses organization, including Jairo Meneses and Renato Pena, and the undercover DEA officers and the informant purchased cocaine from several individuals in the group. On November 27, 1984, the DEA arrested Jairo Meneses and Renato Pena after they delivered a kilogram of cocaine to the undercover officers.
After their arrest, Jairo Meneses and Pena agreed to cooperate with the DEA. As a result of their cooperation, on January 23, 1985, the DEA opened a drug conspiracy case targeting Norwin Meneses. San Francisco DEA agent Thomas Ma was the lead agent on this case, assisted by Rotunno. Jairo Meneses told Ma that Norwin Meneses had supplied the cocaine that Jairo had sold to the undercover officers on November 27, 1984, the day that Jairo was arrested, and that Norwin Meneses had been waiting at Jairo's house for the drug money that day. Jairo said that after his arrest, Norwin Meneses fled to Costa Rica and cut off contact with Jairo.(31)
Jairo Meneses also informed the DEA of the historical operation of the Meneses drug trafficking organization. Jairo said that when he and his family came to San Francisco in 1981, Norwin Meneses recruited him to work in his cocaine business. On a regular basis, the organization distributed cocaine to ten to twelve buyers, one of whom was Danilo Blandon. The cocaine was provided to the buyers on a consignment basis, and Jairo Meneses was responsible for collecting the money from them.
The DEA also debriefed Pena, who described his knowledge of Meneses' drug trafficking activities. Pena said that in early 1981, he met Norwin Meneses at a meeting of the Nicaraguan Contras in San Francisco. Shortly thereafter, Jairo Meneses recruited Pena to work in Norwin Meneses' drug trafficking organization. Pena said that he delivered money to cocaine suppliers in Los Angeles for Norwin Meneses. Pena also identified persons who bought cocaine from Meneses, although he did not mention Blandon.
On June 10, 1985, Jairo Meneses and Renato Pena pled guilty to distribution of a controlled substance in federal court. Both received a one-year sentence, which they served in a work furlough facility, with a five-year probation period.
In June 1986, DEA agent Ma closed his case against Norwin Meneses. He wrote in his report that informants were no longer willing to cooperate and were deactivated. He also wrote that without their cooperation, "it would not be possible to build a successful prosecutable case against the Norwin Meneses organization."
We interviewed Ma, who said he closed the case in June 1986 because the ability of his confidential informants, Jairo Meneses and Renato Pena, to provide current information was limited after their arrests, not because they were unwilling to cooperate. Ma said that they were willing to continue providing historical information, but the information they gave was not enough to get an indictment against Meneses. Also, because their arrests were well-known, their ability to get current information on the organization was limited. Ma said he had received information that Norwin Meneses was living in Costa Rica although he occasionally traveled to the United States. Ma said the CIA did not interfere in his investigation or pressure him to close the case. Rotunno confirmed that there was no pressure from anyone to close the case on Meneses.
E. The FBI and United States Attorney's Office Investigation of Meneses
Rodolfo Orjales was the Assistant U.S. Attorney in San Francisco who handled the indictment and pleas of Jairo Meneses and Renato Pena. He said that at some point, probably just after they had served their sentences, FBI Agent Manuel Hinojosa approached him and stated that Jairo Meneses and Renato Pena wanted to cooperate in order to avoid deportation. Hinojosa told us that he met Pena through his foreign counterintelligence work that Hinojosa did in San Francisco in the early 1980s and that he knew Pena well. Although Hinojosa was not the case agent, he suggested to Pena that he should cooperate. Hinojosa confirmed that he had informed Assistant U.S. Attorney Orjales that Pena and Jairo Meneses wanted to meet with Orjales.
Orjales said he considered the request to meet with Meneses and Pena to be unusual, since Hinojosa was not the case agent on the matter, but Orjales agreed to meet. On July 8, 1986, Orjales met with Pena and Jairo Meneses without their attorneys, at their request. In his interview with us, Orjales said that he did not discuss with Pena and Jairo Meneses the details of their cases and that they provided him with information on Norwin Meneses. Orjales said they told him that Meneses owned a chain of Pollo Loco restaurants in Central America and used them to launder money, and that Meneses was involved in drug trafficking.
As a result of this interview, Orjales informed his supervisor in the U.S. Attorney's Office about what he learned. A later memorandum from the U.S. Attorney's Office to the Justice Department described in detail the information about Norwin Meneses that was provided by Jairo Meneses.(32) The memorandum stated:
Norwin Meneses has dealt directly with leaders of both the Contras and the Sandinistas since the early 1980s in an effort to promote his cocaine enterprise. Norwin lacks any political allegiance and will deal with anyone who will provide cocaine at the lowest price. The cocaine seized by various government authorities in Nicaragua and Honduras is sold to traffickers such as Meneses.
In 1982 Jairo Meneses went to Honduras on behalf of Norwin Meneses to negotiate terms of an agreement with officers of the national military police. . . Under the agreement cocaine would be concealed in automobiles which were then exported to the United States. Approximately ten to twenty kilograms per month were imported in this manner.
Norwin Meneses has also obtained cocaine from individuals in the Sandinista government.
During the Somosa [sic] regime, Norwin Meneses smuggled weapons, silencers and video equipment into Nicaragua, which he exchanged for money or narcotics. The operation was discovered by Oscar Reyes who was a high-ranking customs official under Somosa. Norwin then arranged for Reyes' assassination.
Norwin has also dealt with Enrique Bermudez who was a colonel in the Somosa army and who is now an alleged leader of the Contra faction.
This memorandum noted that there was an ongoing drug task force investigation being conducted in Los Angeles (the 1986-87 Los Angeles OCDETF case against Blandon) and that it was anticipated that the information developed by the DEA and FBI in San Francisco would be of some benefit to the OCDETF case.In 1982 Jairo Meneses went to Honduras on behalf of Norwin Meneses to negotiate terms of an agreement with officers of the national military police. . . Under the agreement cocaine would be concealed in automobiles which were then exported to the United States. Approximately ten to twenty kilograms per month were imported in this manner.
Norwin Meneses has also obtained cocaine from individuals in the Sandinista government.
During the Somosa [sic] regime, Norwin Meneses smuggled weapons, silencers and video equipment into Nicaragua, which he exchanged for money or narcotics. The operation was discovered by Oscar Reyes who was a high-ranking customs official under Somosa. Norwin then arranged for Reyes' assassination.
Norwin has also dealt with Enrique Bermudez who was a colonel in the Somosa army and who is now an alleged leader of the Contra faction.
As a result of this information, the San Francisco United States Attorney's Office transferred the Meneses case from Orjales to a more experienced Assistant U.S. Attorney, Eric Swenson. Swenson supervised the San Francisco FBI investigation targeting Norwin Meneses, which, in the fall of 1986, began collecting and analyzing information and intelligence from its files about Norwin Meneses in an attempt to build a historical drug trafficking case against him.
In early 1987, the San Francisco FBI presented a memorandum summarizing its information about Norwin Meneses to the San Francisco U.S. Attorney's Office for a prosecutive decision. The FBI memorandum stated that, in addition to past intelligence information about Meneses, the FBI had recorded a conversation during a 1984 undercover investigation of other people in which Meneses stated that he owned numerous properties that he used to launder money and that he had an association with Pablo Escobar. Meneses also discussed the smuggling and distribution of kilograms of "apparatus" to Nicaraguans in San Francisco.
The FBI memorandum stated that the FBI had three informants who had discussed trafficking cocaine with Meneses between 1980 and 1985 and were willing to testify. The memorandum also reported that in 1985, another informant told the FBI that Meneses had discussed narcotics transactions and offered to purchase kilogram quantities of cocaine from the informant. The informant also stated that Meneses had a reputation as a gun runner in Nicaragua and may have worked for the CIA.
Because of the OCDETF case in Los Angeles, however, the San Francisco FBI and United States Attorney's Office decided to place the San Francisco investigation against Meneses on hold, or in an inactive status. In the Blandon chapter of this report, we described in detail the Los Angeles OCDETF case, the proposed use of Meneses as an informant in that case, the agreement between the Los Angeles and San Francisco authorities that Meneses would have to plead guilty to a San Francisco-related drug charge, and the eventual closure of the Los Angeles OCDETF case. Before we turn to the use of Meneses after the Los Angeles OCDETF case, we now discuss several allegations that were raised in the San Jose Mercury News articles about the DEA's and FBI's investigations of Meneses in San Francisco during the mid-1980s and the potential compromise of those investigations.
28. The San Jose Mercury News stated that, according to DEA records, Meneses had been implicated in 45 separate investigations. In fact, he was mentioned 53 times in the DEA NADDIS database, but this reflects the number of times that his name was indexed because there was information about him in a DEA file, not the number of investigations targeting him. In any event, the number of "hits" in a database such as NADDIS means comparatively little given the inconsistent manner in which information is put into the system.
29. As we describe in Chapter IX below, Cabezas was a San Francisco drug trafficker who claimed he was associated with the Contras. The San Jose Mercury News articles stated, incorrectly, that Smith never learned that Cabezas lived at the house to which Bermudez was followed. In fact, Smith's report of the surveillance states that Cabezas lived there.
30. In general, criminal tax cases are either "expenditures" cases, in which the purchases of the subject of the investigation are collected and analyzed, or "net worth" cases, in which the investigators establish a financial baseline and seek to establish that flows of income and expenditures do not match what the taxpayer has reported to the IRS, frequently because substantial income has been generated by illegal activities. A pre-existing "cash hoard" can undercut the analytical premise of a net worth tax case by permitting the argument that the funds that permitted substantial expenditures were generated by the pre-existing cash hoard rather than by unreported income.
31. Several reports confirm Meneses' flight from the United States. A 1984 report from the Costa Rica DEA office contained a statement attributed to an informant that Norwin Meneses was then living in Costa Rica and smuggling kilogram quantities of cocaine into the United States. A later FBI report said that Norwin Meneses had left the United States in 1985 and sold his properties in San Francisco.
32. This memorandum was sent in response to a request from the Justice Department for information on investigations or prosecutions of any persons associated with the Nicaraguan Contras. The Department had been asked for this information by Congressional committees investigating the Contras, including the Kerry Subcommittee investigation, as well by the special prosecutor investigating the Iran-Contra case.
http://www.usdoj.gov/oig/special/9712/ch03p1.htm