On July 28, the House Judiciary subcommittee on crime, chaired by Congressman William Hughes (D-NJ), held the first of a series of hearings into whether Reagan administration officials condoned drug smuggling and other criminal activities to further its Central America policy. Among other things, the panel sought to determine if top leaders of the Colombian cocaine cartel escaped arrest because the much ballyhooed "war on drugs" took a back seat to a covert operation designed to discredit the Nicaraguan government-this at a time when the administration was seeking additional aid to the contras.
CBS Evening News (7/28/88), the only major network to cover the proceedings, reported on the testimony of DEA agent Ernest Jacobsen, who said that White House officials undermined a DEA probe of the Colombian cocaine kingpins by blowing an undercover informant's cover when they leaked information in an attempt to link Nicaragua to the drug trade.
The case against the cartel had been engineered by Barry Seal, a convicted drug dealer turned informant who worked closely with Vice President George Bush's anti-drug task force in Washington.
But the 1984 investigation got derailed when Seal told his handlers that cocaine was being trans-shipped through Nicaragua with the permission of high-level government officials. In an effort to frame the Sandinistas, the CIA installed a hidden camera in Seal's C-130 cargo plane(the same plane, incidentally, that later crashed in Nicaragua leading to the capture of Eugene Hasenfus in October 1986). Seal took a blurry snapshot which purported to show himself with a high-level Nicaraguan official named Federico Vaughn, and a Colombian drug czar unloading bags of cocaine at an airstrip in Nicaragua.
CBS obtained pages from Col. Oliver North's diary revealing that the former National Security Council aid communicated frequently with the CIA about the sting operation in the weeks before the photo was leaked to the press despite objections from the DEA. The Nicaragua drug story first appeared in the Washington Times (7/17/84) and was immediately given big play by all the major papers, wire services and TV networks. President Reagan displayed Seal's photo in a nationally televised speech in March 1986.
But the media showed much less interest when subcommittee chairman Hughes recently disclosed he had new evidence that the entire Sandinista connection was a US intelligence fabrication. Particularly suspicious is the role of Federico Vaughn, the supposed Sandinista official, who appears to have been a US spy all along. An AP dispatch (Omaha World-Herald, 7/29/88) disclosed that subcommittee staffers called Vaughn's phone number in Managua and spoke to a "domestic employee" who said the house had been "continuously rented" by a U.S. embassy official since 1981.
The unnamed embassy official, according to Hughes, was among the group of U.S. officials recently expelled by the Nicaraguan government after a violent political demonstrations in July.
No word of the Hughes hearings appeared in the Washington Post or the New York Times. Instead the Times ran a brief item in its Sunday national edition (7/31/88) quoting President Reagan's weekly radio broadcast about how Sandinista officials are still involved in drug trafficking.