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BY day, Baldwin Village is a pleasant Los Angeles neighborhood of two-story apartment buildings, most of them with metal gates and lushly planted courtyards. But by night, residents say, the neighborhood is anything but lovely. When George Pino and Joe Killinger, a pair of real estate investors, began buying buildings in the neighborhood, eight miles southwest of downtown Los Angeles, in , the police asked them to trim their shrubbery so that drug dealers would have fewer places to hide. Pino said, explaining that a tenant had been dealing crack cocaine from an apartment. Killinger, who grew up in rural Nebraska, was particularly dismayed by the plight of Baldwin Village children, who spent their afternoons behind locked doors. Now, in two of their buildings, the partners operate resource centers where the children do their homework and play educational games. The centers are operated by teachers who arrive at p. When Mr. Pino said. Pino is a devotee of the program, which the men incorporated as Learning Links Centers. Despite forgoing rent on the one-bedroom apartments that became the centers, he said, their profits on the buildings have increased. In a neighborhood where vacancy rates average about 5 percent, the partners said, the vacancy rate in their five buildings, which have a total of units, is about 1 percent. They have a particularly easy time renting two- and three-bedroom apartments, because 'parents see this as an opportunity for their children to get ahead,' said Mr. Pino, the son of an Air Force sergeant, who was born in Japan and lived in more than half a dozen cities before moving to California. On a recent Monday afternoon, in the resource center in a building on Coco Avenue, a fourth grader named Capri Downs worked on her multiplication tables, in preparation for a math test. Her sister, Chelsea, was reading a Rugrats book, 'Discovering America. Less than two years ago, 'their mother, Tracee, wouldn't let them come out after school,' Mr. Francoise Foster, a year-old resident, is serving as a de facto teaching assistant, helping younger children with their homework. When the homework is finished, the children are rewarded with the chance to play computer games. Francoise, who will turn 17 next week, said that the center, which opened in the spring of , made it easier for her to do her schoolwork. Now, if it's after 6, and I have to type something, Imani will keep the room open. Killinger and Mr. The men said they did not take salaries for running the foundation, which they at first initially financed themselves but which now depends on charitable contributions. The two met in when both went to work for a real estate auctioneer. Three years later they began buying real estate on their own. Killinger first conceived of the resource centers, he said, he hoped to find teachers to run them in exchange for free or discounted apartments. But that did not pan out, in part because teachers did not want to live in Baldwin Village. Now that the neighborhood is improving, the two hope to expand their holdings, but not in Los Angeles. So last year, they flew to New York to look at buildings in the Bronx. But they were unable to raise enough money from investors. A trip to Dallas was more successful. Earlier this month, Mr. And they are looking at several other buildings near Dallas. Pino and Mr. Killinger are not the only landlords to offer after-school programs. In Prince George's County in Maryland, the company that manages the unit Glenarden Apartments opened a resource center in , after the complex became known as a crime incubator. According to Mary Rush, the regional director for Intercoastal Property Services, which runs the Glenarden Apartments, 'in an area where there is crime, to maintain the building's value as an asset for the owners, we really needed to reach out and develop a social service network. Killinger have their way, resource centers will become commonplace in low- and middle-income neighborhoods. To help make that happen, they are willing to license their manuals and methods to other building owners. But they are also glad to simply spread the word. Pino said, 'more power to them. Pino cites Francoise Foster, who was born in Belize and hopes to attend N. Making a Neighborhood Safe for Kids A brilliant way to privilege underprivileged children Published in The New York Times, September 17, BY day, Baldwin Village is a pleasant Los Angeles neighborhood of two-story apartment buildings, most of them with metal gates and lushly planted courtyards.

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Although Julio Zavala never claimed that there was any connection between his drug trafficking activities and the Contras, one of his co-defendants in the Frogman case, Carlos Cabezas, made just such a claim. Indeed, Cabezas was the only person the OIG encountered who claimed to have personally engaged in drug trafficking for the benefit of the Contras. Cabezas, who was Zavala's former brother-in-law by virtue of Zavala's first marriage to Cabezas' sister Maritza, cooperated with the government after his arrest in , and eventually testified in the prosecution of Zavala. In , Cabezas pled guilty to conspiracy to import cocaine and importation of cocaine, and was convicted in a stipulated facts trial on a Continuing Criminal Enterprise CCE charge. He received a ten-year prison sentence. In two separate interviews with OIG investigators, Cabezas discussed his claims that, between December and December , he and Zavala, as part of an alleged 'Contra Cocaine' enterprise, had smuggled cocaine into the United States from Costa Rica and Honduras in baskets woven from cocaine-stuffed reeds, distributed the cocaine in the San Francisco Bay area, and then carried the proceeds back to Central America for the benefit of the Contras. There, Pereira and Sanchez told him that they were already involved with the Contras, but that they wanted to try to raise more money through drug sales. According to the scheme worked out at this meeting, cocaine from Lima, Peru, was packed into hollow reeds, woven into baskets like the ones carried by travelers or tourists, and then transported to Costa Rica or Honduras for pickup by members of the organization. According to Cabezas, the baskets were then carried to the United States by Fernando Sanchez, the former Nicaraguan Ambassador to Guatemala and brother of Troilo Sanchez, and by several women who worked for Zavala. Cabezas said that on one occasion, he personally carried one cocaine-filled basket to the United States, although, at the time, he had not known cocaine was inside. Cabezas estimated that each basket held about one kilogram of cocaine and that a total of approximately baskets were carried to the United States in about ten trips. Upon arrival in San Francisco, all of the baskets were turned over to Zavala, who Cabezas alleged was in charge of the 'Contra Cocaine' operation in the United States. Zavala then distributed the cocaine to his street dealers to sell. All the money, according to Cabezas, was turned over to Zavala, who ultimately gave it to Cabezas for delivery back to Sanchez and Pereira. Cabezas said that, even as Zavala trafficked for the Contras, he also ran a separate trafficking enterprise, also involving Cabezas, with a Colombian supplier. Within several months of the start of the 'Contra Cocaine' connection, Zavala began using Contra drug money to pay off his Colombian supplier. Thereafter, in the spring of , Pereira came to San Francisco and told Zavala to leave the collection and delivery of the 'Contra Cocaine' money to Cabezas. According to Cabezas, after Pereira's visit Zavala stopped associating with the Contras, and the 'Contra Cocaine' was sent directly to Cabezas, who continued to use Zavala's distributors to sell it to Zavala's customers. S to Costa Rica or Honduras. Cabezas stated that he never actually discussed the origin of the money with Aristides, but he opined that Aristides must have known it was drug proceeds. Cabezas said he had never personally spoken with FDN leader Adolfo Calero, but that it was his belief that Calero knew about the drug trafficking. Cabezas could not provide the OIG with any details that supported that belief. Cabezas acknowledged that Calero was never present when Cabezas had met with Sanchez or Pereira. Cabezas claimed to have personally witnessed one occasion when Pereira disbursed some of the money to a man named Joaquin Vega so that Vega could pay Honduran farmers for food for the Contra troops and their families at a camp near Danli, Honduras. Vega could not be located for interview by the OIG. Cabezas said that his last trip taking money to Central America was just before Christmas He then stopped participating in the 'Contra Cocaine' enterprise because he could not make a profit. Cabezas did not believe Pereira found anyone else to distribute cocaine for him after this time. Cabezas told the OIG that the wiretap tapes made during the investigation of his organization in San Francisco would contain many conversations referring to the 'Contra Cocaine' enterprise, and therefore, the United States government should have known about it. He claimed that one of the tapes recorded a conversation between him and Troilo Sanchez in which they discuss the fact that Zavala was in debt, and that Cabezas was to be solely responsible for the money generated by the sale of the Contra cocaine. Cabezas conceded, however, that there was no explicit mention of the Contras in that conversation. Cabezas also claimed that he had told FBI agent David Alba about the network during a post-arrest interview in February Cabezas said that his statements to SA Alba had been 'off the record. Cabezas also claimed to the OIG that the 'Contra cocaine' enterprise operated with the knowledge of, and under the supervision of, the CIA. Cabezas said he met Gomez only twice, both times in Costa Rica. Cabezas was not certain of the dates, but said that the first instance was an early meeting among Cabezas, Zavala, Pereira, and Sanchez in the Balmoral Hotel in San Jose, and the second instance was a mid meeting of the same people at the San Jose airport. He described Gomez as approximately six feet tall, around pounds, with an athletic build and black curly hair, and without facial hair or glasses. Cabezas said Gomez might have been from the Dominican Republic, because he had a 'dark complexion like a Dominican,' and added that he could tell from Gomez' accent that he was not Colombian, Panamanian, Nicaraguan, Cuban or Argentinean. Cabezas provided conflicting accounts as to how he knew Gomez worked for the CIA. Cabezas stated in one OIG interview that Gomez had said that he was with the CIA and that he wanted to make sure the money got to the Contras, but that Gomez did not show any credentials. In a subsequent interview, Cabezas avowed that Gomez had 'never identified himself and did not say much' at their meeting, but that Pereira and Troilo Sanchez had told Cabezas that Gomez worked for the CIA and was there to ensure that the money from the cocaine went to the Contras. Cabezas contradicted his own allegation about the CIA's involvement with drug trafficking, when, at the end of the interview, he told the OIG that he 'did not believe the United States was involved in the 'Contra cocaine' network. In November , Cabezas testified for the prosecution in Zavala's trial. At trial, Cabezas testified that he and Zavala imported ten or eleven kilos of cocaine from Horacio Pereira between November and September , and that Cabezas and Zavala split the profits with Pereira. He also testified that Pereira had said he was helping the Contra revolution in Nicaragua, and that the 'money belonged to help to the Contra Revolution, that he was going to sell the cocaine \[sic\]. There is also no mention in the article of any claim by Cabezas regarding the CIA. After the San Francisco Examiner article, and after the initiation of the Senate Foreign Relations Subcommittee investigation regarding drug trafficking and the Contras, Cabezas and Zavala were interviewed by the FBI concerning their alleged involvement in trafficking narcotics for the benefit of the Contras. In an October 8, FBI interview, Cabezas made essentially the same claim he ultimately made to the OIG in -- that he had participated in trafficking 'Contra cocaine,' in conjunction with Horacio Pereira, Troilo Sanchez, and Julio Zavala, for approximately one year, beginning in December Zavala was also interviewed by the FBI concerning his involvement with and contributions to the Contras. Zavala did not claim to have participated in the 'Contra cocaine' enterprise described by Cabezas. Zavala told the FBI that 'no one in the Contras had ever approached him to sell cocaine and he \[did\] not know of any other person that was ever approached by the Contras to sell cocaine. He added that he sold cocaine to make a living, and that he would have made similar contributions to the Contras had he been successful in his automobile sales business. Zavala alleged that he had been 'greatly misquoted' concerning the amount of his donations to the Contras by the San Francisco newspaper reporter with whom he had spoken. The OIG's focus in its investigation of these matters was on whether DOJ received information that it failed to pursue because of the United States government's support of the Contras. Our assessment of the truth of Cabezas' allegations is included here with the caveat that the OIG does not consider its interviews to constitute an exhaustive investigation of the issue of whether there was, in fact, such a 'Contra cocaine connection. However, we describe what we have found and discuss our conclusions concerning his claim. According to Source 1, Cabezas and Zavala were helping the Contras with drug money. Horacio Pereira and Fernando Sanchez also claimed that they were taking the money to help the Contras. Source 1 was able to provide only a few details of the 'Contra Cocaine' enterprise -- some seem to corroborate claims made by Cabezas, but others conflict substantially with those claims. Source 1 told the OIG that Cabezas and Zavala ran two drug trafficking organizations: one was distributing Colombian cocaine for their own profit, and the other distributing cocaine from Honduras. Source 1 was aware of how the deals were organized. In order to get cocaine from Sanchez and a man named 'Rayo,' Zavala and Cabezas had to agree to give 50 percent of their profits to the Contras. The money had been transported from the United States to Honduras by Horacio Pereira and Fernando Sanchez, and Pereira had once been arrested in Miami, Florida taking money out of the country. In contrast to Cabezas, Source 1 stated that the cocaine had been carried to San Francisco in 'bricks' by some 'girls,' or shipped, concealed in rattan chairs. Source 1 noted that, during his time with the Zavala organization, no one had ever alleged or mentioned any CIA involvement. Source 1 provided the OIG with inconsistent information concerning whether he had reported the 'Contra cocaine connection' to his FBI handlers. When asked why Source 1 had not told his FBI handlers of it, Source 1 first responded that 'they never asked. He thereafter backtracked, saying he was not sure if he told anyone, but thought he would have. He finally stated that he had separated the drug and 'political' parts of the case, that he had not seen the fact of the money going to the Contras as significant, and that he was 'not concerned' with reporting that fact to the FBI. We reviewed Source 1's FBI informant file to determine what, if anything, he had said in debriefings between and about the use of drug money in funding the Nicaraguan Contras. The file contains no mention of money going to the Contras or the Nicaraguan revolution. The only references related to the Contras or the Nicaraguan revolution are as follows:. Because Sanchez' ties to Somoza prevented him from going back to Nicaragua, he relied on Lara to conduct his drug business for him in Nicaragua;. Since the revolution he has lived in the United States and has given millions of dollars to pay for the counter revolution. He reportedly owns a yacht and an airplane. We talked to Source 1 and Alba about this information. When asked about the reports, he did not recall them specifically. There is no indication in Source 1's file that drug proceeds were transported by Horacio Pereira, Fernando Sanchez, or Troilo Sanchez, or that the money went to the Contras. Source 1's descriptions of where the money from Zavala's and Cabezas' drug trafficking was going focused on purchases of cars and other large purchases by Zavala and Cabezas, and tells how the two arranged for the transport of money to Costa Rica. The file contains only the following information about Sanchez and Pereira: on January 28, , Source 1 identified Troilo Sanchez as Zavala's boss in Costa Rica and stated that he believed he was Mexican. On February 2, , Source 1 reported that Cabezas said that Sanchez was not willing to deal with him. On April 26, , Source 1 reported that Sanchez said that he and Horacio Pereira were no longer working together because Cabezas had paid Pereira, but Pereira had never paid Sanchez his share. Source 1 reported that Zavala went to look at a legitimate shrimp business that Horacio Pereira was running in Honduras, and that Pereira was concerned in early about police surveillance. FBI Special Agent David Alba, the case agent in the Frogman case, told the OIG that he did not recall Cabezas or Zavala, or any of the other defendants telling him about an alleged Contra 'connection' during his post-arrest interviews of them. Alba vaguely recalled that, after Cabezas' arrest, Cabezas said he had sold drugs just to make money. Alba said it was possible that Cabezas could have told him about the Contra cocaine connection 'off the record,' as Cabezas alleged, but Alba had no recollection of that happening. Alba also noted that 'nothing is ever really off the record,' once a witness has been advised of his rights after arrest. Nevertheless, Alba said he would not insist that someone stay 'on the record' who was willing to provide information. But Alba did not recall Cabezas providing any information on the Contras, either on or off the record. Alba did not recall ever hearing that Zavala and Cabezas had been jointly running two separate drug organizations -- one for themselves and one for the Contras. And he noted that there had been no indication of two organizations on the wiretap tapes. Alba had heard the names Horacio Pereira and Troilo Sanchez, but did not recall that either of them was involved with the Contras. However, Alba stated that Sanchez and Pereira were never developed as subjects in the case, and were never indicted, arrested and prosecuted in the case, because there was no evidence linking them to the 'Frogman' case, Zavala and Cabezas, or any other drug activity. Alba was responsible for handling Source 1 as an informant. Alba said that although he had debriefed Source 1 at least once a day during the Zavala case, Alba did not recall Source 1 ever saying that the Contras were dealing drugs or profiting from the drug sales, or that Zavala or Cabezas were sending money to the Contras or selling drugs for the Contras. He noted that, while he did not always document everything he hears from an informant if it does not seem relevant to his case, he considered it 'more than likely' that he would have deemed information about the Contras dealing drugs or profiting from drug trafficking to be important enough that he would have documented it. Alba also noted that Source 1 was 'accurate and trustworthy as far as sources go. San Francisco Assistant U. Attorney Mark Zanides, who handled the prosecutions in the Frogman case, told the OIG that he was not aware of any alleged Contra cocaine connection in the 'Frogman' case until Zavala had filed his motion to take depositions. Zanides said that Cabezas, who cooperated with the government, had identified himself as a former Somoza supporter, and had not mentioned any involvement with the Contras, fundraising for them, or dealing in 'Contra cocaine. The wiretap of Zavala's telephone had shown Zavala to be consistently drunk and trying to get out of debt, because he was not making much money at drug dealing. Like Alba, Zanides was not aware of any mention of the Contras, the CIA, or 'fundraising' during the lengthy period of electronic monitoring that preceded the arrests. He noted that, contrary to Cabezas' claims about 'Contra cocaine,' the DEA reports of investigation indicated that, although many of those under investigation were Nicaraguan, their sources for drugs were Alvaro Carvajal and his mother -- both Colombian. Attorney's Office, James Lassart, who handled the investigative portion of the case, told the OIG that he had never heard anything about the Contras or 'Contra cocaine' on the wiretap conversations. Nor had he heard that cocaine was brought into the United States in woven baskets, or that it came from Peru. Lassart recalled that as far as he knew all of the cocaine in the Frogman case came to the United States from Colombia on Colombian oceanliners, was dumped overboard at the destination ports, and then retrieved and hauled to shore by swimmers in wetsuits. Lassart stated that the investigation had revealed that the money from the drug sales had been sent back to Colombia inside cardboard record album covers. He noted that he believed that Cabezas had initially worked for Zavala, but that Zavala, who was 'whacked out' all the time from drugs and alcohol, 'lost it,' and Cabezas 'sort of took over' running the cocaine trafficking enterprise. Lassart added that the main player in the case ended up being Carvajal. Former U. Russoniello did not recall any allegations about the CIA and drug trafficking from that time period, and said he had never received any pressure from anyone to proceed differently on any case because of a 'Contra or CIA connection. Former Criminal Division Chief John Gibbons stated that he had seen allegations about drugs and Contras in the media, but did not think much of it. He stated that the 'CIA defense' is a common defense in San Francisco because jurors there sometimes credit government conspiracy stories and acquit defendants. Scott A. Nelson, the former Assistant Special Agent in Charge of the FBI San Francisco office, told the OIG that he had never heard any allegations of CIA or Contra involvement in drug trafficking, other than what the media had reported, and had no reason to believe such activity ever occurred. Nelson said that the CIA employee expressed an interest in learning about any allegations of drug money going to the Contras. Nelson had informed the person that he had no information about such activities. The OIG did locate two cables dated April 10, from a domestic CIA office to CIA Headquarters that stated that the CIA had contacted Nelson concerning the Zavala matter and learned that: 1 the FBI handled the matter as a criminal, and not a foreign counter-intelligence, matter; 2 the FBI had the 'impression that Zavala and Cabezas were professional drug dealers and nothing more'; 3 Nelson offered to arrange a meeting between Russoniello and the CIA to discuss the matter; and 4 the CIA office 'advised against \[a meeting\] because of the politicized atmosphere in which \[Russoniello\] works and the assumed undesirability of having it possibly become public that \[the CIA\] was making such local inquiries. Fresques said that this interview was the first time he heard about 'Contra Cocaine. Cabezas told Fresques that he and Zavala were distributors for Alvaro Carvajal and that they had sold a couple of kilos of cocaine on their own and were supposed to send part of the proceeds back to the Contras. Cabezas had stated that, when Zavala had failed to pay money back to Carvajal, Cabezas had had to collect the money and deliver it to Carvajal. Cabezas said Zavala was always drinking and using cocaine. Fresques reported that he had also talked with Zavala, in the early s, during other investigations unrelated to Contras, but Zavala never mentioned the Contras or 'Contra cocaine. Fresques never heard about any CIA knowledge of or participation in drug smuggling, or about any CIA interference in any investigations. Cabezas never mentioned 'Contra Cocaine' or said he was selling drugs for the Contras. Hinojosa never heard that the CIA was involved in any drug smuggling or that they knew about any drug smuggling. Dybsky did not recall Zavala having made any statement about the seized money. Dybsky did not interview either Zavala or Cabezas subsequent to their arrest, and he does not recall ever hearing any allegations of Contra or CIA involvement in the drug trafficking from anyone involved in the case. The informant told the FBI that the Zavala organization did not support the Contras and that the cocaine sold by Zavala was not supplied by the Contras. Gibler added that Zavala had been part of the Colombian Carvajal-Minotta organization, which had been the primary source of narcotics in the Frogman case, but Zavala had not been the leader of the organization. Hardman was not able to recall exactly when he spoke with Zavala about the matter, but is certain that it was after Zavala's arrest on March 13, , but prior to Gary Webb's 'Dark Alliance' series appearing in the San Jose Mercury News in August According to Hardman, Zavala told him that Zavala and Cabezas kept all of their drug trafficking profits for themselves and never gave anything to the Contras. Zavala also said that Cabezas lied about the 'Contra Cocaine' connection in an attempt to 'scam his way out of prison. Zavala admitted that in the early s he had distributed cocaine from two sources: a Colombian named Alvaro Carvajal and Nicaraguans Horacio Pereira and Troilo Sanchez, who were living in Costa Rica. Zavala traveled to Costa Rica monthly from San Francisco to deal in drugs, usually with Pereira and Sanchez, until Cabezas -- his former brother-in-law and business partner -- cut him out of the loop and started dealing with Pereira directly. Zavala was aware of Cabezas' allegation that they were dealing 'Contra cocaine,' but denied it was true. He said that his dealings with Sanchez and Pereira had nothing to do with the Contras. He did not know if Sanchez or Pereira had had any relationship with the Contras. Zavala denied ever giving money to the Contras. He explained that he 'probably' told the FBI in that he had given small amounts of money to the Contras because he had given money to a friend named Lecayo, who would 'probably say' that Zavala had given some small contributions to the Contras with Meneses. Troilo Sanchez, who Cabezas alleged was one of his suppliers of 'Contra Cocaine,' also denied Cabezas' allegations and denied being involved in any way with the Contras. However, when interviewed by the OIG, he claimed no involvement in any drug trafficking activities at all. He admitted having known Horacio Pereira, and he believed that Pereira had been involved in drug trafficking in Los Angeles and San Francisco. Sanchez said he did not know the details of those activities, but said he knew they had not been for the benefit of the Contras. He noted that Pereira and Norwin Meneses had been involved in trafficking together even before the overthrow of Somoza. Sanchez said he knew Zavala and Cabezas only socially, through Pereira. Sanchez recalled having had contact with only one person who claimed to have been with the Central Intelligence Agency CIA , stating that the contact had occurred in the early part of Sanchez said he did not know if Roberto was involved in drug trafficking with Meneses. Sanchez recalled that Roberto often commented that he knew Sanchez was acquainted with many Colombians, and Roberto pushed to be introduced to the Colombians. Sanchez stated that Roberto used to have a 'very close relationship' with the Costa Rican police. Fernando Sanchez, who Cabezas alleged was a member of and money courier for the 'Contra cocaine' enterprise, denied these claims when interviewed by the OIG. Sanchez was the Nicaraguan Ambassador to Guatemala from When the Sandinistas seized power in , Sanchez remained in Guatemala, where he functioned as the representative for all Contras in Guatemala. He denied ever having carried any baskets to the United States or any money to the Contras anywhere. He also denied knowledge of any drug trafficking to support the Contras. He denied knowing Julio Zavala or Carlos Cabezas. He said he knew Horacio Pereira, who was a friend of his brother Troilo, but had no knowledge of any drug trafficking by Troilo, Pereira, or others. Sanchez stated that neither Pereira or Troilo Sanchez had, to his knowledge, ever been involved with, or given any money to, the Contras. Shortly thereafter, the Honduran and United States governments began to subsidize them. Sanchez denied that his Contra group had ever received money from drug trafficking, claiming that allegations to that effect were 'gossip. Sanchez was never asked by any Contras to engage in drug trafficking and he knows of no one who was. He avowed that the FDN had been completely involved in fighting and winning the war and had no time for drug trafficking. Julio Zavala's current wife, Doris Salomon, told the OIG that she did not recall her husband ever saying that he or Cabezas was selling cocaine for the Contras. She denied discussing with Zavala any relationship he had with the Contras, if one existed, and she was not aware of any donations he made to them. She recalled seeing Sanchez and Cabezas at the hotel during her second stay but was not certain whether Pereira was also there, and did not know why the men might have been there. Salomon said she knew both Pereira and Sanchez, but not well. The last time she had seen Pereira was in Costa Rica, prior to her extradition back to the United States in early on drug trafficking charges unrelated to the Frogman case. She had heard that both were drug dealers, but did know whether either had ever provided drugs to Zavala or Cabezas, or whether they had been connected to the Contras. Although Salomon said she had heard rumors about the CIA's involvement with the Contra movement and drug trafficking, she said she had no knowledge whatsoever about any such matters. Cabezas had told her that he was involved with the Contras, but she did not know the nature of his alleged involvement. She noted that she did not trust Cabezas and would not believe anything he said. According to all accounts, Horacio Pereira is deceased. The OIG was not able to independently confirm this claim, but was notified that efforts to locate him through the American Embassy in Managua failed. The Kerry Subcommittee's report, entitled 'Drugs, Law Enforcement and Foreign Policy,' included a short section on the Frogman Case, alluding to the allegations raised by Zavala and Cabezas after their convictions that they delivered money to the Contras in Costa Rica. The section also described the return of the money to Zavala. It reached no conclusions as to the validity of their claims or the reasons for the return of the money. Shortly thereafter, however, the CIA terminated its use of Source 1 sometime in and the FBI began using him as an informant on the 'Frogman' case. Adolfo Calero told us that he has a sister who lives in New Orleans, Louisiana, but that he does not know anyone named Fernando Calero.

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