Chapter VIII:Julio Zavala
Media reports have suggested that the return of $36,000 in funds seized by the San Francisco US Attorney's Office from Julio Zavala in 1984, just prior to his conviction for cocaine trafficking, was concerning and suspicious. This matter came under scrutiny from both the media and Congress in 1986, but investigators for the 1988 Subcommittee of the Senate Foreign Relations Committee told the OIG that they had never been able to access DOJ records and could not reach to any firm conclusion as to why the money was returned. . HeSan Jose Mercury NewsThe "Dark Alliance" articles brought up the issue again, reporting that "US Attorney in San Francisco, Joseph Russoniello, had returned $36,000 to a Nicaraguan cocaine trafficker arrested by the FBI." The article went on to report: "The money was returned, court records show, after two Contra leaders sent letters to the court swearing that the drug trafficker had been given the money to buy weapons for the guerrillas. Russoniello said that it was cheaper to return the money than to refute the claim".
This section will examine the circumstances surrounding the return of the $36,000 to Zavala in the "Frogman Case," which got its nickname because swimmers were arrested in San Francisco Bay bringing cocaine ashore from a Colombian ship. We describe in detail the case and the allegations raised in that case by certain individuals about trafficking cocaine on behalf of the Contras.
A.Background to the frogman case
1. The investigation
In January 1982, the San Francisco division of the FBI began an investigation into the activities of a large-scale narcotics distribution network in the San Francisco, California, bay area. The investigation, which was conducted jointly by agents from the FBI, DEA and US Customs Service (USCS), became the first case for the Organized Crime and Drug Enforcement Task Force (OCDETF). ) in the country. FBI Special Agent (SA) David E. Alba was the case agent. Assistant United States Attorney for the Northern District of California James Lassart oversaw the investigative portion of the case, and Assistant United States Attorney Mark Zanides handled any criminal prosecutions of the defendants. The investigation, which included a six-month court-authorized wiretap, resulted in the arrest and conviction of more than 50 subjects and the seizure of approximately 555 pounds of cocaine, fourteen vehicles, approximately $300,000 in U.S. currency, and approximately $100,000 in jewelry. . Among the defendants arrested were Nicaraguans Julio César Zavala-Moreno and Carlos Augusto Cabezas-Ramírez. The main drug seizure in the case occurred on January 17, 1983 when twelve people, some of whom were wearing wetsuits, were arrested while trying to unload 430 pounds of cocaine from a Colombian freighter in San Francisco Bay.
2. The arrest of Zavala and the seizure of $36,000
After the frogmen were arrested, OCDETF agents obtained indictments and arrest warrants for twenty-two other defendants in the cocaine smuggling ring. Julio Zavala was one of the defendants arrested on February 15, 1983 by virtue of said arrest warrants. Zavala was arrested at his own residence in South San Francisco along with two other people.(Sixty-five)The execution of a search warrant by OCDETF case agents at Zavala's residence resulted in the seizure of numerous items, including approximately 364 grams of cocaine, two weapons, and $36,020 in United States currency from Zavala's bedroom. The seized money, along with the other seized items, was held in the custody of federal authorities pending trial.
In an interview with the OIG on April 8, 1997, Zavala claimed that the agents had actually seized $65,000 from his nightstand -- $45,000 in Contra money and $20,000 of his own -- but reported seizing only $36,020. Zavala never filed a formal complaint about the alleged lack of money, but claimed to have reported the discrepancy to his attorney, JuddC. Iversen. In his interview with the OIG, Iversen could not recall Zavala ever telling him about the alleged shortage.
3. Disposition of the charges against Zavala
Following his arrest, Zavala was indicted in San Francisco federal court on various counts of narcotics trafficking, including one charge under the Continuing Criminal Enterprise (CCE) statute. On July 6, 1984, without any agreement with federal prosecutors, Zavalap was found guilty of one count of possession with intent to distribute cocaine. Because this charge carried a much lower sentence than the other charges, prosecutors decided to go to trial on the remaining charges.(66)Zavala questioned whether he was guilty of the CCE charge, which carried the most severe penalty: a mandatory minimum prison term of ten years without parole and a maximum sentence of life in prison. On March 29, 1985, after a non-jury trial with stipulated facts, Zavala was found guilty of five counts of illegal use of a communications facility and also of the CCE charge. He was sentenced to ten years in prison, followed by three years of special probation.
B.Accusations of Zavala's connections to the Contras and the CIA
1. First Mention of the Contra in the Zavala Case
Prior to Zavala's guilty plea and subsequent bench trial, his defense attorney, Judd Iversen, filed several motions on Zavala's behalf. On May 2, 1983, Iversen filed a motion to reduce Zavala's bail, along with various exhibits. A statement by Zavala and an article from the February 20, 1983, Nicaraguan newspaper were included as annexes to the motion.The Barricade. In his statement, Zavala stated that the article presents him as a "Somocista" (Somocista) who has used drug trafficking to support counterrevolutionary (Contra) activities in Nicaragua. Zavala stated that because of the articles he could not return to Nicaragua or Costa Rica without endangering his life and that of his wife and his family.
2. Defense Motion to Make Depositions in Costa Rica
On June 4, 1984, Iversen filed, under seal, another pretrial motion, with supporting materials, requesting authorization to make statements in San José, Costa Rica. In these materials, which included his own statement entitled "Statement of Judd C. Iversen in Support of Motion for Order Grant to Take Statement," Iversen made two basic assertions regarding the charges against Zavala: (1) that the money seized from Zavala belonged to the Contras and was not the product of drug trafficking; and (2) that United States government agents were involved in the alleged drug conspiracy for which Zavala had been arrested. Iversen provided support for these complaints:
-- newspaper reports that the CIA and the US government were supporting the Contras;
-- a newspaper article stating that Zavala was involved in cocaine trafficking to support the Contras;
-- letters purportedly from two Contra leaders stating that Zavala was a member and assistant treasurer in their group, that Zavala was in the United States "to promote the restoration of democracy in Nicaragua" and that, for this mission, Zavala had received $45,000 in cash in the last week of January 1983, in San José, Costa Rica. According to the letters, this was the money seized as presumed drug proceeds by the agents who had arrested Zavala;
-- Iversen's belief that "the Government of the United States of America has been aiding and supporting the [Conservative Party of Nicaraguans in Exile (PCNE)] to re-establish Nicaragua's democratic system" and that this support included training , weapons, financing and assistance. in obtaining all of the above;
-- Iversen's belief that "[PCNE] agents are currently in the United States to raise funds for their cause and their presence and purpose are known to and aided by agents of the United States of America."
-- Iversen's belief that one of the phone conversations, after being identified as involving a Nicaraguan ambassador, was "downplayed" by agents despite the fact that the conversation appeared to be drug-related;
-- Iversen's belief that the CIA was involved in drug trafficking during the Vietnam War as a means to finance covert operations.
Iversen concluded from this information that:
[A]gents of the United States government were intricately involved in the alleged conspiracy and sanctioned the use of cocaine trafficking to raise funds for counterrevolutionary activity and/or entrapped [Zavala] into participating in the belief that such activity was sanctioned.
3. Authenticity of the Avilés and Rappaccioli Documents
Iversen attached to his motion versions in Spanish and English of documents allegedly written by Vicente Rappaccioli Marquis, General Treasurer of the PCNE, and Francisco Aviles-Saenz, Political Secretary of the PCNE.
The first document was an unsigned "Receipt For $45,000" on PCNE letterhead, which stated that Zavala had received $45,000 in cash from the PCNE in San José on January 24, 1983. Zavala's name was written on the bottom. There were no signatures or other identifying marks.
The second document was an undated, one-paragraph memo typed on PCNE letterhead and titled "Treasury." The document, signed solely by Rappaccioli, said that Zavala had been appointed "Assistant General Treasurer[sic] of the Conservative Party," and that he was "authorized to raise [money] within the United States for the liberalization [sic] of Nicaragua from International Communism".
The third document, also an undated typewritten statement on PCNE letterhead, was signed by both Avilés and Rappaccioli, and stated that Zavala was a member and joint treasurer of the "Conservative Party", apparently a reference to the PCNE. The document further stated that Zavala was in America to promote the restoration of democracy in Nicaragua, "for whose mission he received forty-five thousand dollars in cash the last week of January 1983 in San José, Costa Rica." The document said that the US government's withholding of the money was hurting the Contra effort.
The fourth document, signed solely by Avilés, was also an undated, one-page typescript letter on La Unión Democrática Nicaraguense, Fuerzas Armadas Revolucionarias de Nicaragua (Unión Democrática Nicaragüense, Fuerzas Armadas Revolucionarias de Nicaragua) (UDN-FARN) letterhead. . The letter stated that Zavala was a member of the UDN-FARN who had made several trips to Costa Rica "before the last week of January 1983," and that on his last trip "he was given the amount of forty-five thousand dollars in cash for characteristic purchases of this organization".
It is interesting to note that the document signed by both Avilés and Rappaccioli, which is on PCNE headed paper, and the letter signed only by Avilés, which is on UDN-FARN headed paper, each establish that Zavala had received $45,000, presumably from the organization. on whose letterhead the document was written. Despite what the documentation indicates, Zavala only claimed to have received a total of $45,000 from the Contras.
With the exception of Rappaccioli, who is deceased, the OIG interviewed all individuals who appear to have had some involvement in the drafting, acquisition, or court filing of these documents. Each gave the OIG a different story.
Francisco Aviles-Saenz (Avilés) is a Nicaraguan lawyer who fled from Nicaragua to Costa Rica in 1981 because "he was accused of being a right-wing terrorist with the intention of blowing up an oil refinery." Avilés was Political Secretary of the PCNE and Secretary of International Relations of the UDN-FARN. Avilés wrote or signed several of the documents in question. We interviewed Avilés twice. In both interviews, Avilés admitted that he handed over various documents about the money seized from Zavala or Doris Salomon (Zavala's wife).(67)However, in the first interview, after reviewing the documents presented in court, Avilés assured that these documents had been altered. He denied having produced any documents stating that the Contras had given Zavala money; he claimed that the documents he wrote said only that Zavala was a member of the party that was authorized to raise funds for the Contras and that the money seized had been raised by Zavala. When he was interviewed again, Avilés admitted that, although he still remembered writing that the money had been collected by Zavala, his memory was "fuzzy" and that the documents might not have been altered. Aviles said he had written the letters in part to help Doris Salomón, Zavala's wife, who had asked him to write them. He added that he did not know that Zavala was involved with drugs at the time he wrote the letters.
Zavala told the OIG that he had nothing to do with obtaining the documents from Rappaccioli and Avilés. Zavala claimed that after his arrest, he contacted his wife, Doris Salomón, in Costa Rica and asked her to inform Avilés that the money had been seized by the federal government. Zavala claimed that Salomón had arranged for Avilés to produce the documents. Zavala did not know who Rappaccioli was, but he thought a second document from another member of the organization had been produced. (We discuss his claims, and the claims of others, about the source of the money in section G of this Chapter.)
Doris Salomon told the OIG that she was only aware of one document related to the seized money that had been delivered to Zavala. She recalled having spoken with Avilés, at Zavala's request, about a letter requesting the return of the money. She believed that the letter signed by both Avilés and Rappaccioli was the document she requested. Salomon denied having altered, changed or falsified any of the documents submitted with Iversen's statement, and she denied any knowledge of or involvement in anyone else doing so.
Judd Iversen told the OIG that he had no personal knowledge of the circumstances surrounding the creation of any of the documents filed with his motion. He believed that Salomon had made arrangements for them. Iversen understood that the money seized from Zavala had been sent to San Francisco by the Contras to raise funds. He had no reason to believe that it would be used to buy any kind of war equipment. Iversen recalled thinking it was strange that the Contras would send money to the United States, but that Zavala was pretty credible on the matter and at least followed through on obtaining the affidavits, which is more than most of his clients did. .
The DOJ OIG and the CIA OIG jointly attempted to obtain the originals of the documents, which should have been filed with the court along with Iversen's motion, with the intention of having them reviewed by a document examiner. Unfortunately, only one of the documents presented to the court, the one signed only by Avilés, was original; the rest were photocopies. The DOJ OIG suggested that a document analyst from the Immigration and Naturalization Service (INS) Crime Lab review the original document. ; he found no evidence of alteration.
Based on the conflicting information provided by all interviewees, we are unable to reach a definitive conclusion as to exactly how the Avilés and Rappaccioli documents were obtained for inclusion in the motion. It seems clear, based on Avilés' statements and the INS Laboratory report, that at least the document signed only by Avilés is genuine in its current form, and that Avilés gave the document to someone to use on Zavala's behalf. .
4. Decision on the defense motion
On June 12, 1984, Chief Justice Robert F. Peckham held aex parthearing to consider Zavala's motion to take a statement in Costa Rica. Iversen said that he needed to testify to two people in Costa Rica for two different reasons. The first reason was to establish the purpose of Zavala's trips to Costa Rica and the origin of the money that was seized from him. Iversen maintained that many of Zavala's trips "had to do with his relationship with the Nicaraguan Democratic Union," and that the money belonged to that Contra organization. The second reason was Iversen's hope of finding evidence of a connection between US government support for the Contras and Contra drug-trafficking activities, if such a link existed. Such evidence would be relevant, Iversen believed, to a "defense of scandalous government conduct."
Judge Peckham asked Iversen what evidence existed to prove the involvement of the CIA or other US agency or official in drug trafficking. Iversen explained that he believed that one of the government informants in the case, and the informant's son, had been heavily involved in the conspiracy's activities, but had not been arrested. Furthermore, Iversen stated that he believed the informant had significant political involvement in the revolution in Nicaragua.
Judge Peckham ruled there was no basis to allow the statements to develop the "government's scandalous conduct defence", but granted the motion to take statements in Costa Rica to allow Iversen to develop evidence on the origin of the money.
5. Allegations in the CIA Statement
When interviewed by the OIG, Iversen explained that the allegations in his statement about CIA involvement in drug trafficking were taken from a newspaper article. Iversen could not remember when or in which newspaper the article had appeared. Iversen stated that Zavala had mentioned to Iversen the CIA's involvement in drug trafficking, but Zavala had no specific information on that topic. Iversen said the newspaper article gave him a good faith basis to make the allegations in the affidavit and then try to find evidence in Costa Rica to back them up.
Zavala told the OIG that he did not know why his lawyer had made allegations in the affidavit about the CIA's involvement in drug trafficking with the Contras. Zavala acknowledged that his lawyer had been acting on his orders, but said he had only heard rumors of such CIA activities and had no facts to support the claim. Zavala said he also did not know why his lawyer had argued that the identities of the Costa Rican witnesses could not be revealed for fear of CIA reprisals against him.
A memo written by Assistant US Attorney Mark Zanides, dated August 6, 1984, documented a telephone conversation he had with Marvin Cahn on August 3, 1984. Cahn was one of Zavala's defense attorneys and a partner of Iversen. According to the memo, Cahnt told Zanides that the main reason for going to Costa Rica was to obtain information about the origin of the money, but that the defense also wanted to gather materials to indict one of the government's witnesses in the trial. Cahn told Zanides that the defense believed the person suspected of being a government informant in the case worked for the Sandinista government buying AR-15 rifles and hand grenades, and was also involved in cocaine and weapons trafficking.(68)
Ultimately, the allegations of US government involvement in Zavala's drug trade were clearly a defense tactic and not based on any credible evidence. Iversen himself described the allegations of outrageous government misconduct as the "theatrical" aspect of the case.
6. Preparations to Take Depositions in Costa Rica
Upon being notified of Judge Peckham's order granting the motion to take statements in Costa Rica, Assistant US Attorney Zanides took a series of steps to initiate the process. On July 25, 1984, after obtaining the approval of US Attorney JosephP. Russoniello, Zanides submitted an official request for travel approval to the Justice Department's Executive Office of United States Attorneys. On July 26, 1984, Zanides applied to the State Department's Passport Office for an official government passport. The FBI office in San Francisco notified FBI headquarters of the proposed trip of Zanides and FBI Special Agent David Alba to Costa Rica, with a request that "logical individuals/agencies" be notified. The declarations of Avilés and Rappaccioli were scheduled in Costa Rica for August 16, 1984.
7. Disclosure of the defense motion
In his August 6, 1984 memo documenting his telephone conversation with Marvin Cahn, Zanides reported telling Cahn that "Washington was having problems with the financial situation regarding the trip to Costa Rica." The memo said:
I then asked him what they really wanted from the statements and if an explanation of the source of the money was all we were really looking for. Cahn said that [he] thought money was the most important thing. So I suggested that if that was true, it would be necessary to go to Costa Rica if he decided to forget the money. Cahn said that he thought that would be fine, but that he would have to talk to Judd Iversen and get back in touch with me on Monday.
On August 7, 1984, the US Attorney's Office filed a motion with the court to obtain access to the sealed documents that Iversen had submitted in support of his plea request. On August 8, 1984, the court held a hearing on this motion, and the court granted the prosecutor's request, ordering the documents to be opened. That same day, the United States Attorney's Office rejected a plea deal proposed by the defense that would have returned the money to Avilés. On August 9, after having reviewed the documents, the United States Attorney's Office moved to reseal the documents. Due to this request, the court canceled its previous order to open the documents and the documents were resealed. Additional notice.
Sixty-five.Review of FBI and US Attorney's Office records revealed that one of these other individuals was not prosecuted in this case. We asked case agent David Alba and OCDETF chief James Lassart why the person was not prosecuted. Both men told us that according to their recollection, the person had never been the subject of any investigation in the case, nor had he been involved in any way in the drug trafficking enterprise. Both Lassart and Alba opined that the person was likely "just" at Zavala's home when the arrest and search warrants were executed, and that he had been "dragged" in the process.
66.Despite strong court pressure to drop the additional charges against Zavala and proceed with sentencing based on his original guilty plea (because of the additional cost to the government that a trial would entail), the United States Attorney's Office , however, proceeded to trial on the remaining charges.
67.Zavala has been married twice. Before the start of the Frogman case, he was married to Maritza Cabezas, sister of Zavala's co-defendant, Carlos Cabezas. In January 1981, Zavala married his current wife, Doris Salomon.
68.Iversen told the OIG that Cahn had stated that "someone from the State Department" threatened to confiscate their passports if they attempted to travel to Costa Rica. Cahn told the OIG this never happened.