Danilo Blandon was a full-service drug dealer. In addition to the tons of inexpensive
cocaine he provided his clients, he also sold them assault weapons and sophisticated
communications gear, including anti-bugging devices and hidden microphone detectors to sniff
out undercover cops.
''We had our own little arsenal,'' recalled Rick Ross, who was Los Angeles' biggest crack dealer in the mid-1980s. ''Once he tried to sell (my partner) a grenade-launcher. I said, 'Man, what the f--- do we need with a grenade-launcher?' ''
In federal court testimony last March, Blandon said his source for such accoutrements -- which included Uzi submachine guns and Colt AR-15 assault rifles -- was an ex-Laguna Beach burglary detective named Ronald J. Lister. Lister and his partners, Blandon testified, sometimes showed up at meetings of Contra supporters in L.A. to demonstrate machine guns and other weapons.
Lister, 50, claimed he worked for the Central Intelligence Agency, according to federal officials and FBI documents. He later worked as an informant for both the DEA and the FBI, records and interviews revealed. While his purported CIA connections could not be confirmed, it is beyond dispute that the former cop was travelling in some mighty unusual circles.
Christopher Moore, a Los Angeles attorney who once worked as an office assistant for Lister's company, Mundy Security Group, said Lister sent him to El Salvador in June 1982 to ''babysit'' a U.S. government contract the company had. Moore, who said the contract was for a security system at a Salvadoran Air Force base, said he ended up dealing with the head of El Salvador's right-wing death squads, the late Roberto D'Aubisson.
Lister often spoke of ''being protected by the CIA,'' Moore said in an interview. ''I didn't know whether to believe him or not.''
Nicaraguan cocaine smuggler Norwin Meneses -- Blandon's chief drug supplier -- also knew Lister. In a recent interview, Meneses said Blandon and Lister made several trips to Central and South America in the early 1980s to buy weapons for the Contras.
In late 1986, as part of Special Prosecutor Lawrence Walsh's Iran-Contra investigation, FBI agents interviewed Lister's former real estate agent, who told of Lister paying cash for a $340,000 house in Mission Viejo. When the realtor asked Lister where the money came from, Lister replied that he was raising funds for the Contras, an activity he described as ''CIA-approved.'' Lister said the same thing about his security business, the FBI report said.
Moore's revelation that Lister had a contract to install a security system at a Salvadoran airbase is especially intriguing since there is considerable evidence that El Salvador's air force was deeply involved with cocaine flights, the Contras and Blandon's cocaine supplier, Norwin Meneses.
Meneses said one of his oldest friends is a former Contra pilot named Marcos Aguado, a Nicaraguan who lives in El Salvador and works for the Salvadoran Air Force high command.
Aguado was identified in 1987 Congressional testimony as a CIA agent who helped the Contras get weapons, airplanes and money from a major Colombian drug trafficker named George Morales. Aguado admitted his role in that deal in a videotaped deposition taken by a U.S. Senate subcommittee that year.
His name also turned up in a deposition taken by the Congressional Iran-Contra committees that same year. Robert W. Owen, a courier for Lt. Col. Oliver North, testified that he knew Aguado as a Contra pilot and said there was ''concern'' about him being involved with drug trafficking.
Aguado surfaced once again in 1991, this time in connection with Meneses' alleged plot to turn Nicaragua into a cocaine storehouse for the Bogota cartel of Colombia. Meneses testified that Aguado sold him an auto transport trailer, which was in the process being stuffed with cocaine when the Nicaraguan police burst upon the scene. Aguado was not charged.
While flying for the Contras, Aguado was stationed at Ilopango Air Base, near the capital of San Salvador. He told Senate investigators that Ilopango was where he'd taken some of the arms and planes donated by the Colombian drug trafficker Morales in 1983 and 1984.
In 1985, the DEA agent assigned to El Salvador, Celerino Castillo III, began picking up reports that cocaine was being flown to the United States out of hangars four and five at Ilopango as part of a Contra-related covert operation. Castillo said he began snooping around the facility and soon confirmed what his informants were telling him.
In a series of reports starting in January 1986, Castillo documented the cocaine flights -- listing pilot names, tail numbers, dates and flight plans -- and sent them to DEA headquarters in Washington.
The only response he got, Castillo wrote in his 1994 memoirs, was an internal DEA investigation of him. He took a disability retirement from the agency in 1991.
''Basically, the bottom line is it was a covert operation and they (the DEA) were covering it up,'' Castillo said in a phone interview from Texas. ''You can't get any simpler than that. It was a cover-up.''
DEA officials would not respond to those statements and the agency ignored an FOIA request for Castillo's reports. Lister, who pleaded guilty to federal cocaine charges in 1991 and is serving a prison sentence in Phoenix, did not respond to several requests for an interview. Aguado could not be reached for comment.