DEPOSITION OF ADOLFO CALERO

Thursdays, April 9, 1987
United States Senate
Select Committee on Secret
Military Assistance to Iran
Opposition
Washington, D. C.

Deposition of ADOLFO CALERO, called as a witness

by counsel for the Select Committee, the witness having been

duly sworn by MICHAL ANN SCHAFER, a Notary Public in and for

the District of Columbia, at 10:00 a.m., at the offices of

the Select Committee Room SH-90l, Hart Senate Office

Building, Washington, D.C. and the proceedings taken down

by Stenomask by MICHAL ANN SCHAFER, and transcribed under

her direction.

Q. Now prior to the time that the Sandinistas took

over in Nicaragua were you a businessman in Nicaragua?

A Yes, I was general manager of the Coca-Cola

Bottling Company in Nicaragua, a franchise. The Nicaraguan

company, we had a franchise for Coca-Cola for 25 years and I

was director of various business enterprises that grew out

of the Coca-Cola area, like automobile distributorship,

hotel, a ceramics plant, and a refrigerator plant and

various other things.

Q. And had you been a critic of the Somora regime?

A Yes, I was a critic, strong critic of the Somoza

regime, when I left Nicaragua in 1982, in December 1982, I

had been for the last three years the spokesman for the

Conservative Party, I was jailed by Somora in 1978 for

about a month and on a few other occasions, too.

Q. And when did you leave Nicaragua?

A I left Nicaragua on Christmas vacation in December

1982 and I could not come back because where were rumors

that they were after me. Apparently my name had been leaked

as belonging to various organizations, especially the FDN,

and my home was looted by national security forces towards

the end of January 1983.

So I decided to stay out and join the FDN,

official category as a director.

Q. And when did you join the FDN?

A Officially as director I made an announcement here

in Washington in February.

Q. In February of 1983?

A '83, yes. But I had had relations for quite some

time, as I had with other exile groups, too.

Q. That's Mr. Bobbitt of our staff who just entered.

Could you give us just for the record some

description of what the FDN was and how it was founded?

A The FDN came about through a fusion of various

groups of Nicaraguans. Some of them, like Berdo Joaquin

Gonzalez, who had belonged to, the Sandinista military, and

other Sandinista guerrillas, national guardsmen who were

also gathering to counter the Sandinistas, and people,

others like me, who had never had anything to do with

neither the Sandinistas nor the Somoza regime.

That was back in 1981. It acquired its name, I

believe, towards the end or the beginning. I'm not sure --

the end of 1981, beginning of 1982. It began to be known as

the FDN, Nicaraguan Democratic Force. It had a civilian

directorate and a military directorate at the time.

I was invited a number of times to participate,

but I was still in Nicaragua and I didn't want to come out.

I wanted to stay and fight inside. But by the end of 1983,

December of 1983 --

Q. December of ' 82 or ' 83?

A '82, excuse me, a directorate came up, the

seven-person directorate, and a slot was left in it for me

for when I came out. And it was supposed to be in pectore.

Q. What is that?

A In pectore is in the chest.

Q. In the heart?

A The group decides, but it doesn't come out. And

well, of course, that leaked.

Q. And that's when you left Nicaragua?

A No, no, because I found out about It in Nicaragua.

I was still In Nicaragua and I had been without a passport

for about two months, and finally one of the members of the

junta got me a visa to go out for a vacation, and I had all

the intention to go back.

Q. Now, when you decided to not return and to

officially join the FDN, you mentioned that you became a

director of the FDN.

A Yes.

Q. At that point, which would be the beginning of

1983, did the FDN still have both a military directorate and

a political-civilian directorate?

A Well, it was supposed to have only one

directorate, which was the civilian directorate, with one

milltary member, six civilians and one military. However,

in practice it actually had two directorates.

Q. And you joined the civilian directorate?

A I joined the civilian directorate, yes.

Q. And was there a leader of the FDN at that point?

A No.

Q. Who was in charge of the military side of the FDN

when you joined?

Q. And who was that?

A That was Emilio Echaverri, and also as a member of

the civilian directorate was a man with military background,

which was Bermudez, Enrique Bermudez, Militarily Echaverri

was at the head, was the chief of staff, but I would say

that Bermudez was, say, more respected or more --

Q. He was better known?

A Yes, better known and more respected.

Q. Now the directorate functioned as a committee?

A The directorate functioned -- I don't know what

you mean a committee.

Q. Was there a chairman of the FDN at that point?

A No, there was no chairman of the FDN at that

point.

Q. Was there a person who was first among equals?

A Well, no, there wasn't at that point. we all had

different areas of concentration.

Q. And what was your area of concentration?

A My area of concentration was the political

aspects, international political aspects. I was doing more

writing than anything else. There were others in charge of

the -- I think Bermudez and another fellow, Rodriguez, were

more, had more to do with the military. Then Edgar

Chamorro, who seems to have become famous for denouncing us,

he was in charge of publications.

Q. Now was the FDN rounded in around 1981?

A I believe so, yes.

Q. And by the time tnat you became a member of this

directorate in the beginning of 1983, was it engaged in

military or paramilitary operations?

A They had already -- the kickoff, let's say, point

of the organized Nicaraguan resistance is March 22, I

believe, of 1982.

Q. And what marked that kickoff?

A The blowup of bridges in the northern part of

Nicaragua. One big bridge was blown up. Another was

seriously damaged. And the Sandinistas clamped down on the

civilian rights in Nicaragua. So that was the kickoff, I

would say.

Q. Now did you have some information about what the

size of the FDN force was when you joined it in the

beginning of '83?

A We did not have much information.

Q. A rough figure -- 5,000?

A Two thousand, maybe -- 2,500, 3,000.

Q. Now, at that point how was the military operation

of the FDN being funded?

A I remember [INFORMATION BLACKED OUT] were there when I came

in. There were [INFORMATION BLACKED OUT] there who were doing part

of the training and who were also -- I understood by stories

that I was told that there was no direct involvement between

Americans and Nicaraguans. All was done through [INFORMATION BLACKED OUT]

[INFORMATION BLACKED OUT], but I'm just talking reference.

Q. Did you come to understand at some point that the

CIA was funding the FDN?

A That was my impression, but it was being done

[INFORMATION BLACKED OUT] one point, and I don't remember

how long after we were there. Then there was a direct

connection. Direct connection was established with --

Q. The CIA?

A Well, I never saw -- they never showed me the

card.

Q. But with the United States?

A With people working for the United States

Government, yes, whom I gather were CIA.

Q. And during this period when the United States was

directly involved who handled the procurement of supplies,

military supplies?

A I don't know who did, but all I can tell you is

that we were handed over whatever our needs were, and there

was a ceiling. I remember talk about a ceiling which was at

different levels at different times, and I wouldn't

remember.

Q. Is it fair to say that the weapons and military

supplies were given to the FDN?

A Yes.

Q. And that the FDN was not involved in purchasing?

A In procurement, definitely not.

MR. PORTUONDO: Excuse me a second. Adolfo, you

have never given a deposition before, but it's difficult for

her to write down or copy when both people are speaking.

Why don't you wait until he finishes his question;

otherwise, she is going to have a very difficult time.

THE WITNESS: Fine.

BY MR. LIMAN: ( Resuming )

Q. How did the FDN receive the funds to pay its

troops?

A Troops were not paid as such. Some of the

officers and some of the people in different jobs who had

families to support were given what was called family

support.

Q. And where did that money come from?

A My understanding is that it came from the United

States Government.

Q. And do you know how that money was transferred?

A No.

Q. In 1983 was there a budget that the FDN had for

paying its people?

A Well, I don't remember a budget as such. I mean,

I was not connected with ~hat aspect of the 'operation.

Q. Who handled that aspect of arranging for the

payments?

MR. PORTUONDO: For family support?

BY MR. LIMAN: ( Resuming )

Q. For family support?

A To tell you the truth, I don't remember. I know

Echaverri would get a certain amount of money and he would

in turn distribute it to different people. That was for the

military.

Q. Do you know where he got that money from?

from the United States?

A From the United States.

Q. Do you know who actually handled the transfer of

the money?

A No, sir. It would be impossible. I can tell

you --

MR. PORTUONDO: Your answer was no.

BY MR. LIMAN: (Resuming)

Q. With whom did you deal as representatives of the

United States Government in 1983 in connection with funding

of the organization?

MR. PORTUONDO: It assumes you dealt with someone.

BY MR. LIZMAN: (Resuming)

Q. He indicated he had earlier.

A [INFORMATION BLACKED OUT] head was [INFORMATION BLACKED OUT] and we also had lots of

dealings with [INFORMATION BLACKED OUT] -- he went by many names. I knew

him as [INFORMATION BLACKED OUT] but then everybody began to talk about

[INFORMATION BLACKED OUT] I'll remember the name later on.

Q. And what did he do? What was his role?

A He was in charge of Central America or he was

maybe project director or whatever. And then there was

another, [INFORMATION BLACKED OUT] also that we dealt with.

Q. Did you deal with Colonel Steele? Did you deal

with him at all at that point?

A Colonel Steele? The name doesn't --

Q. Did you deal in 1983 with Oliver North?

A Well, I met Colonel North. I believe my

recollection was that I met him; [INFORMATION BLACKED OUT] in 1984, but I

did not meet him, and if I did, I have no recollection.

Going back to the money, I did not finish telling

you that the directors were given also family support and

that was given to us at different times [INFORMATION BLACKED OUT]or put

into accounts, into accounts of ours, and as far as I know I

can tell you about me. I don't know about the others, how

they got it.

Q. In 1983 where were you living?

A I was really nowhere because I had no status

anyplace.

Q. Were you spending time [INFORMATION BLACKED OUT].

A I was spending a lot of time [INFORMATION BLACKED OUT]. Most of

my time, I mean, I spent traveling also in other countries,

in Europe.

Q. And is it fair to say that you were trying to

develop political support for the FDN?

A Yes, yes, definitely political support and we were

trying to convince people. [INFORMATION BLACKED OUT], if I remember, was

trying to tell the world what the Sandinistas really were,

see, because we Nicaraguans were the first to find out what

they were doing.

Q. Did you know how much the United States Government

had appropriated in 1983 for support of the FDN?

A No. No, sir.

Q. Do you know what the [INFORMATION BLACKED OUT]ces were that led

to the withdrawal of [INFORMATION BLACKED OUT].

A No.

Q. When did [INFORMATION BLACKED OUT] come in?

A [INFORMATION BLACKED OUT] came in in 1983, but before [INFORMATION BLACKED OUT] came in, when we came in as directors, let's say, there was . . . . . .

. . . . . is that?

A Viaticos, that's per diems and travel expenses.

Q. Now this schedule for July of 1984 shows, am I

correct, that the total expenditures in dollars after

translation comes to about [INFORMATION BLACK OUT]

A Yes.

Q. Am I correct that that money is the money that was

provided by the United States Government?

A No.

Q. Where did that money come from?

A This money in July 1984 we began to receive money

from foreign sources. This has nothing to do with United

States money.

Q. When you say you began to receive from foreign

sources, into what account were you receiving that?

A Into the accounts that you already have.

Q. I believe.that the substantial money that you

began receiving from foreign sources into your account began

in July of 1984.

A That's it.

Q. So this money was being spent out of the money

that.was coming into the account that you maintained?

A Yes.

Q. And before that, before July of 1984, you also had

these expenses; am I correct?

A Yes.

Q. And how was that money being received?

A That was money received from the United States

Government.

Q. And into what accounts were those monies put?

A They did not go into accounts at all.

Q. That money was disbursed directly by the United

States?

A It was disbursed directly by the people who were

your representatives down there on a weekly or biweekly

basis, depending on the type of the expense.

Q. And those were the people that you mentioned

earlier?

A Yes.

Q. Were you aware when you joined the FDN that the

President of the United States had authorized the CIA to

provide assistance to the FDN?

A Yes. I was told so.

Q. And who told you that?

A [INFORMATION BLACK OUT] his name was [INFORMATION BLACK OUT]

Q. And did he have a position with the United States

Government?

A Yes. He's the one that described as being the

project director or the chief for Central America. He, if I

remember correctly, is the one who told me that this project

had the backing of the President of the United States and

that it was being funded, obviously, by the United States.

Q. And [INFORMATION BLACK OUT] I gather, is the name that you

were trying to think of before?

A Yes, yes. That's it.

Q. Now did there come a time in 1984 before you

started to pay these expenses directly out of your account

when you were told that there was doubt whether the United

States government would be able to continue to provide

funding?

A Yes.

Q. Tell me about that in your own words.

A Well, through 1983 we were seeing that our project

had many detractors, that it had bad press, that it

definitely was beginni.ng to turn into a partisan issue.

Q. Dispute?

A Dispute. That the President's backing was clear.

It was clear the Republican backing was clsar. The

conservative Democrats were pretty much on our side,

southern Democrats, and that we were in more trouble. I

mean, it was very obvious since 1983. And then came the

time in 1984 when there were no more funds voted, in June --

May.

Q. Do you recall that as early as February of 1984 it

had become apparent that you would be running out of United

A Yes.

Q. Who did you talk to who was still employed by the

United States Government about what other sources of funding

might be available once the official funds ran out?

A Well, Just at the time there is a meeting that has

been referred to, which I have called like a pep meeting, a

pep talk, which took placed [INFORMATION BLACK OUT]

when Oliver North -- and I believe that's my recollection of meeting Colonel

North.

Q. Do you recall when that was?

A June maybe, May, '84.

Q. Colonel North's diaries reflect a meeting with you

on April 6, 1984 in Washington.

A In his office. I was shown that by the --

Q. Independent Counsel?

A Independent Counsel. However, I said I'm sorry,

do not recall that [INFORMATION BLACK OUT]

Q. You recall that there came a time when you did in

fact meet with General North in his office in Washington;

correct?

A Oh, yes, but that was after [INFORMATION BLACK OUT]

Q. So that your recollection is that you first met

him [INFORMATION BLACK OUT]

A Yes.

Q. And then whatever meetings you had with him in

Adams.

Q. Or the side of the park of the Hay Adams?

A Oh, that's where I referred to, the place you

called Jackson Place. That's what I referred to. Across

the street from Lafayette Park, which is the park by the Hay

Adams, is where I met Colonel North -- three, four, two

times. I don't remember how many times.

Q. Now I will tell you that the first time that

Colonel North's diaries refer other to Jackson Park or to

the Park itself are an entry for June 26, 1984, which is

just prior to the first deposit of a million into the

account. Does that refresh your recollection at all as to

when you were first told that money would be coming in?

A No, because, see what happens is that my

recollection of giving Colonel North my account number was

in his office and not in that place.

Q. Well, the diary of Colonel North indicates that he

met you at his office on June 25, 1984, and June 12, 1984.

A In Jackson Place?

Q. No, at his office.

A Maybe June 12, maybe I gave him.

MR. PORTUONDO: He doesn't want you to guess.

BY [INFORMATION BLACK OUT] : (Resuming)

Q. You had three meetings with him, according to his

diary, in June -- two in his office and then a third at

accounts?

A Then we started to buy all these things ourselves.

Q. And who handled the procurement for your

organization?

A Well, it was different people.

Q. Tell me who..

A The procurement of boots and uniforms and belts

and web gear was handled by my brother.

Q. And where was he located?

A He was located in New Orleans. I handled the

procurement of weapons and ammunition. And [INFORMATION BLACK OUT]

we had a procurement office that handled all the food and

medicine and local purchases [INFORMATION BLACK OUT]

we also began to obtain things, some things.

Q. Did you have any expertise in procurement of

weapons before this?

A No, sir.

Q. So let's get the sequence. The United States

Government funding ends, funding starts coming into your

back account and all of a sudden you have to become an

expert in buying weapons; is that fair to say?

A Well, there were very few things that we were

buying, you know. It was not a matter of -- it was a matter

of buying only a very limited line of weapons and

ammunition.

A The total amount was about [INFORMATION BLACK OUT]

which we paid in installments of [INFORMATION BLACK OUT]

Q. Did you understand that Martin was the principal

or a broker?

A I understood him to be working for --

Q. Gretsch world?

A R&M Equipment. And it turned out, I found out

later, that R&M Equipment were brokers or agents for this

GretschWorld.

Q. How did you know how many rifles to order?

A Well, from our needs, we were having thousands of

people swarming over to us which we could not arm.

Q. And who would communicate ~t you how many rifles

you needed?

A Bermudez.

Q. And is it a fact that McCoy would deal directly

with Martin on what type of rifles you should buy and what

the price should be? Who handled the negotiation with

Martin on what type of rifles you should buy and what was a

fair price?

A We were offered [INFORMATION BLACK OUT] G=3s. This was a purchase

of opportunity, that the rifles were in --

Q. [INFORMATION BLACK OUT]

A No. It turned out afterwards they were in [INFORMATION BLACK OUT]

and that they were in bond, that they . . . . . . . .

. . . BY MR. LIMAN: (Resuming)

Q. Mr. Calero, did Colonel North tell you to whom he

was reporting this information?

A No.

Q. What did you expect him to do with this

information that you were communicating to him?

A That the U.S. Government should be informed of

what we were doing. We were allies and we also gave

information to the CIA people.

Q. Which CIA people?

A The CIA people were always snooping. For a while

we called them the snoopers because they wouldn't do

anything for us and all they would do was look after us, you

see.

Q. Did Colonel North ever say to you that he wanted

to know how you were spending the money that he had raised

for you?

A The way you put the question, sir, is --

Q. Did he ever ask you to account for your

expenditures of money?

A I did submit to him three, four times, a written,

you know -- that we have purchased so much this, so much

that, an idea of what we were spending. But I never gave

him an invoice or anything like that.

Q. But you submitted to him some handwritten account

of what you had purchased?

A Yes.

Q. And how much you had paid?

A Yeah, approximate, because it was all from --

Q. From memory?

A From memory, yes.

Q. And was it handwritten?

A Yes.

Q. And when did you first submit such an account to him?

A It must have been in 1985, beginning of 1985,

because it must have been after we got -- see, I did not. put

a big order in until we got the big money.

Q. The big money is what?

A The big money we got in February and March.

Before then we were getting $1 million, and then the next

month another $1 million, and we never knew if it was going

to continue, for how long it was going to be.

Q. And the big money was the $24 million that you got

in February and March of 1985?

A Twenty-four and a half or 24. I don't remember

exactly.

Q. And when you received that money, that's when you

began to submit these handwritten accountings to him?

A No, because before I had given him more or less an

UNO by General Secord or his organization amounting to about

$30 million?

A Sir, I could tell you that I couldn't be aware of

a small purchase, but a purchase like that I would

definitely have to be aware, and I am not absolutely aware

of any such purchase having been done or any such purchase

having been consulted with me.

Q. In 1986 what was it costing a month to maintain

your forces?

A It reached real heights on account that our forces

came out of Nicaragua and was over $1 million a month -- way

over.

Q. $1.5 million?

A $1 million-something. I can check it.

Q. Where was that money coming from? was that NHAO

money?

A Well, the NHAO money went from July -- the NHAO

money began -- no, it went from September '85 to more or

less -- it extended. There were some payments into -- there

were small payments even in July or June-July of '86. We

ran up a debt of $1.9 million, almost $2 million between

July of '86 and November -- July and October, when the $100

million -- the last week of October the $100 million began

to operate.

We still have that debt. And then we picked up . . . .



A No. I did not look to him for military advice.

Q. Did you consider that he had raised the $1 million

a month that you received?

A I considered not necessarily for the $1 million a

month, but I considered that he was instrumental for us in

speaking out for us, that he had the credibility, that he

had the position, that he had the connections that a

foreigner cannot come to this country and talk, but a U.S.

military man or Marine who could speak well --

Q. Who did you think had raised that $24 million you

received in February-March 1985?

A Sir, I didn't care really much who did.

Q. I can understand that you didn't care where it

came from, but who did you think had raised it?

A Even that. I mean, my objective was keeping a

struggle going. I did not --

Q. What would you have done if you hadn't received

the $24 million? Would you have had to close shop?

A No. We would have kept on going somehow.

Q. Was the $24 million important?

A The $33.5 million. It was $33.5 million that we

got.

Q. That was important?

A That was very important, yes.

Q. And still you didn't inquire where it was coming

from?

A No, sir.

Q. Did you conclude that it was a matter of secrecy

and that you shouldn't ask?

A I thought it was a matter that the less it was

talked about the better, that I shouldn't even know, and

then I began reading. In the back of my mind I always had

this is, you know, [INFORMATION BLACK OUT] you know

[INFORMATION BLACK OUT] and this, that and the other thing.

Q. So that's where the money was?

A That's where the money was and that was my

feeling.

Q. But no one told you that?

A Except for General --

Q. Secord?

A Secord talking about talking to [INFORMATION BLACK OUT]

or whatever.

Q. Did he ever mention which [INFORMATION BLACK OUT]

he spoke to?

A Maybe he did give the name, but I don't remember.

Q. [INFORMATION BLACK OUT]

A Well, I've read his name.

Q. Do you know whether he mentioned that?

A No. I could not attest that he mentioned that,

[INFORMATION BLACK OUT]

took it -- . . . . . . .

A He was an agent of ours, yes.

Q. And Hondu?

A Hondu Carib?

Q. Yes.

A Hondu Carib is a transport company that

transported for quite a while merchandise that we got and

purchased in the States and took down to

Q. And Bibbinsand Rice?

A Bibbins and Rice is another one of these surplus

web gear and boots.

Q. Front Line?

A Front Line is the same

Q. DIACSA?

A Those were the transfers. We made intra-account

transfers.

Q. And Genesco?

A Genesco is a book manufacturer in Tennessee.

Q. That's right. Forest Surplus?

A Fowler?

Q. Forest.

A Forest, another one of these suppliers of surplus.

Q. And ONYX Aviation?

A ONYX Aviation. We bought a plane one time there.

$65,000?

Q. Yes, you've got a good memory.