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August 30, 1996

Janet Reno

Attorney General

10th & Constitutional Ave., NW

Washington, D.C. 20530


Dear Madam General:

I am writing on an issue of utmost concern to me, my constituents, and, indeed, the fair application of justice in our society.

As you are probably aware, the San Jose Mercury News did a recent series of newspaper articles outlining the origins of the crack cocaine trade in the United States. What those articles traced, among other things, is the long-term relationship between Norwin Meneses, a Nicaraguan drug trafficker, Danilo Blandon, a Nicaraguan businessperson connected to the Contra rebels as well as a drug trader, and Rick Ross, an American who worked with Blandon distributing crack cocaine in this country. These individuals represent a much broader and more troubling relationship between U.S. intelligence and security policy, drug smuggling, and the spread of crack cocaine into the United States 

The information contained in the newspaper articles -- as well as related issues highlighted in other fora over the past several years -- raises concerns on many different levels. But what is clearly established by the San Jose Mercury News is the implication of the United States government, in particular the Central Intelligence Agency (CIA), in using the services of both Meneses and Blandon, and their use of the proceeds of drug sales to implement CIA-directed efforts to raise money for weapons to overthrow the Sandinista government in Nicaragua. Thus, portions of this country may have been exposed, indeed introduced, to the horror of crack cocaine because certain U.S.-government paid or organized operatives smuggled, transported, and sold it to American citizens. 

Crack cocaine has ravaged many communities in this country. You know I am deeply concerned about this problem. In addition to the stress caused by crack cocaine use, I am also terribly disturbed by the heavy-handed, arbitrary, and discriminatory mandatory minimum sentences which politicians have attached to crack cocaine use and possession. These sentences have the effect of severely punishing small-time users, and are prosecuted in a discriminatory way which disproportionately impacts African-American males.

In contrast, the San Jose Mercury News documents the exceeding light punishment that has been applied to both Meneses and Blandon, despite their years of involvement in massive scale drug trading. Again, the notion that a U.S.-government agency knew about the drug-tainted resources that were funding a war in Nicaragua, and the idea that those involved allowed a major infusion of cocaine onto the streets of America because of its blind devotion to win a war -- a war which was at the time being conducted secretly -- is among the more devastating assertions one could make about this government. As someone who has seen how the crack cocaine trade has devastated the South-Central Los Angeles community, and as a public official, I cannot exaggerate my feelings of dismay that my own government may have played a part in the origins and history of this problem.

Moreover, Danilo Blandon, is currently on the payroll of the government of the United States, an agent for the Drug Enforcement Agency (DEA). This mastermind drug dealer recently testified against Rick Ross, in essence freeing himself for the years of torment, devastation, and ruined lives for which he is responsible. Blandon's testimony against Ross is only the most recent example of a large-scale, international drug importer who scapegoats a local distributer for his own evils. Amazingly, by virtue of Blandon's years of pumping drugs into this country, his intimate knowledge of the inner-workings of drug trafficking, and his connections to the crack cocaine trade in the U.S. -- and thus, his use to federal prosecutors -- he has shifted all his responsibility and punishment onto Ross, while Blandon now lives a comfortable life. The unfairness of this arrangement is so obvious so as to offend any American's sense of justice.

As a U.S. Representative of South-Central Los Angeles, one of the communities most ravaged by crack cocaine, I have a keen desire to get answers to the many questions that have been raised by the San Jose Mercury News expose.

As you know, in the late 1980s, Congress held extensive hearings on the connection between foreign policy, narcotics, and law enforcement. Those hearings produced damning evidence of wrongdoing. However, due to continual obstruction, from many different sources -- including federal law enforcement agencies -- those hearings were not able to establish as precise a trail of guilt as the recent San Jose Mercury News article has, at least as it pertains to the origin of the crack cocaine trade in the U.S.

Given the severity of these assertions, I would like to obtain as much information as I can about the particulars of this disturbing case. I see thousands of young men being sent to jail for five, ten, twenty years, with no hope of parole or another chance -- because of relatively small-time drug use and possession. Yet, it seems, our own government may have been a key initiator -- knowingly or unknowingly -- in bringing this killer into our neighborhoods. You can imagine what message this sends to the millions of young people who see their communities destroyed by this foreign substance. A story like this, and the terrible example it sets for those who struggle every day against a drug culture desperate for converts, can ruin years of work to imbue a sense of self-respect and trust in government efforts to break the drug cycle in our communities.

Please know that I want to be in close touch with your office on this matter. I would like to request a full and complete investigation into the connection between law enforcement agencies, most particularly the CIA, and the early-1980s importation of crack cocaine. In addition, I would like to know what actions may have allowed these drug shipments to continue. I would also like to know the status of any efforts to investigate, punish, or prosecute those involved in this matter.

I understand there are legal proceedings underway which makes it more difficult to share certain information. However, much of the information has already been made public, and surely, much more is available. The impact and the implications of the Meneses/Blandon/Ross/Contra/C.I.A. crack cocaine connection cannot be understated. As such, I would request in the most urgent manner I can, that your organization work with me to bring some resolution to this critical matter.

We all have an obligation to get to the very bottom of the origin, development, and implementation of this seedy enterprise. I look forward to working closely with you to bring about greater understanding, a full airing of the events surrounding this incident, and, hopefully, a satisfactory conclusion to this entire ordeal. Thank you in advance for your cooperation.



Maxine Waters

The following excerpt is from the 1998 Senate Budget Committee session. Note the underlined portions.


U.S. FEDERAL RESERVE BOARD CHAIRMAN ALAN GREENSPAN: .....making sure that surplus is there.

U.S. SENATOR ERNEST F. HOLLINGS (D-SC): Yeah, making sure that surplus is there. I'm telling you, Dr. Greenspan, that's music to my ears.

HOLLINGS: Well, the truth is...ah, shoot, well, we all know there's Washington's math problem. Alan Sloan in this past week's Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.

That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule, I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that.

We owe Social Security 736 billion right this minute. If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. Isn't that correct? Thank you very much, Sir. Thank you, Mr. Chairman.

It should be obvious from the above that the government has for decades been taking the money intended to pay Social Security benefits and spending it as general revenue. The Social Security trust fund is filled with Government IOUs, and those people who insists Social Security is solvent are operating in the faith that T-bills are always good, because the taxpayer can always be forced to redeem them.

But there is a problem. There are so many T-bills in the Social Security fund that when the baby-boomers start applying for benefits, the sudden surge of T-bills being presented for payment would collapse the Federal System, because there are not enough young taxpayers to carry the extra load.

Senator Warren, a fighter for Social Security and for all of us, discovered that, on top of their already great wealth, the top 350 CEOs in the nation received a 3.9 percent raise in their pay last year. And she thought that if 3.9 percent was good enough for our CEOs, it is good enough for our seniors, people with disabilities, and veterans. Acting on her insight, she, together with 18 Senate co-sponsors, has introduced S.2251, the Seniors and Veterans Emergency Benefits Act. 

The bill would provide seniors, veterans, people with disabilities, SSI recipients and others a one-time payment equal to 3.9 percent of Social Security's average benefit, or about $580. The bill would fund the one-time benefit payment to Social Security beneficiaries and others by closing the "performance pay" loophole, which allows CEOs to escape the $1 million cap on their compensation, and their companies to deduct the excess compensation, at a cost to taxpayers of around $9.7 billion a year. In theory, the excess pay must be performance based - but research shows that it rises even when CEOs drive their companies into the ground. Another report by the Institute for Policy Studies and the Center for Effective Government reveals, for example, that Gary Loveman, CEO of Caesar's Entertainment, received in 2010 and 2011 "performance-based" and other fully deductible bonuses totaling $10 million for those two years, the same years the company experienced $1.5 billion in losses.



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