The Iran Contra Affair First Revealed when Pilot Eugene Hasenfus is Shot Down Over Nicaragua While Delivering Arms & Cocaine to the Contras

The (Iran) Contra affair is first revealed on this date when pilot Eugene Hasenfus is shot down over Nicaragua while delivering arms to the Contras (and quite likely cocaine if it had made its way back to the U.S.). Hasenfus admits to being CIA, a claim immediately publicly refuted by CIA insiders as General John Singlaub of the American Security Council and Elliott Abrams of the State Department.

On March 16, 1986, President Ronald Reagan went on national television to make a desperate pitch for the restoration of congressional aid to the Nicaraguan Contras. This particular war had never been popular with Americans, who stubbornly remained indifferent to lurid scenarios proffered by the Great Communicator that the Sandinistas might sweep north through Guatemala and Mexico to menace Texas. So Reagan deployed a new tactic, denouncing the Sandinistas as a regime that had its hand in the drug trade.

For the previous six months, Oliver North and his colleagues at the National Security Council and the CIA had been leaking stories to the Washington press corps charging that the leadership of the Nicaraguan government, including Defense Minister Humberto Ortega, was in league with the Medellin cartel and with Fidel Castro in a hemisphere –wide cocaine-trafficking network. On that March evening, Reagan displayed a series of grainy photographs purporting to show Sandinista officials loading duffel bags of cocaine in a C-123K military transport plane destined for Miami, Florida.

“I know that every American parent concerned about the drug problem will be outrage to hear that top Nicaraguan government officials are deeply involved in drug trafficking,” Reagan said. “This picture, secretly taken at a military airfield outside Managua, shows Frederico Vaughn, a top aide to one of the nine commandants who rule Nicaragua, loading aircraft with illegal narcotics bound for the United States.”

As that Time magazine editor told his reporter Lawrence Zuckerman, this was precisely the kind of drug story that would end up on the front pages of American newspapers. But it turned out to be a setup, part of an elaborate sting operation concocted by Oliver North, the CIA, George Bush’s drug task force and a convicted drug runner named Barriman Alder Seal. It was Seal who had piloted the plane, equipped with CIA-installed cameras, to that Nicaraguan airstrip and brought the cocaine back to Homestead Air Force Base in Florida. In return for his services, Seal received more than $700,000 and a reduced sentence on pending drug convictions.

Years later the DEA admitted that Seal’s CIA-sponsored mission was the only drug flight involving the Sandinistas it had any information about. To this day, Frederico Vaughn remains a figure clouded by mystery, with no one quite sure who he is or who he was working for. Seal wasn’t around to answer any questions either. A few weeks before Reagan’s television address, Seal was gunned down while in a federal witness protection program in Baton Rouge, Louisiana- a victim of Oliver North’s press leaks.

Barry Seal was a veteran of both the drug trade and the intelligence business. Born in Baton Rouge, Seal was a bulky, athletic man with a beguiling presence. He was 5-feet-7 inches tall, weighed 250 pounds and wore thick muttonchop sideburns. He had a passion for cars, women and Snickers bars, though he neither smoked nor drank nor used cocaine.

Seal’s first contact with the CIA came in the 1960s while he served as a pilot for the US Army’s Special Forces division. He left the army in 1965 to become, at the age of twenty-six, a pilot for TransWorld Airlines, and it’s apparent that Seal continued his relationship with the Agency during his employment with the airline. In 1972 Seal was busted by the US Customs Service for attempting to smuggle 14,000 pounds of C-4 explosives into Mexico. The bomb-making material was destined for a CIA-trained cell of anti-Castro Cubans. Seal lost his job at TWA but escaped prosecution when the CIA intervened. The agency told the US Attorney’s office that a trial would “threaten national security interests.”

It wasn’t long before Seal turned his considerable skills as a pilot and entrepreneur to Latin America’s emerging black market in drugs and guns. In the mid-1970s he bought a small fleet of planes, recruited a network of ace pilots and mechanics (many of whom were veterans of the war in Vietnam and Laos) and developed ties to the leadership of the Medellin drug cartel.

By his own admission, Seal became the Medellin cartel’s chief link to the cocaine markets of the southeastern United States. In federal court, Seal testified as a government witness in a drug trial that he earned more than $50 million smuggling cocaine and marijuana. But the pilot was most certainly being uncharacteristically modest. Investigators for the Arkansas State Police told the US Justice Department that they believed Seal’s enterprise had raked in between $3 billion and $5 billion from the late 1970s up to his bloody death in 1986. Seal’s bank records show that in 1981 he was making daily deposits of $50,000 in his favorite bank in the Bahamas. The drug money was reinvested in a variety of schemes, from hotels and casinos to a TV network and a drug company.

In 1982 Seal moved his base of operations from New Orleans to the small town of Mena in the Ouachita Mountains of western Arkansas. It was in this same year that Seal once again hooked up with his friends in the CIA, who were anxious to use Seal’s fleet of planes to ferry supplies to Contra camps in Honduras and Costa Rica. The flight plans for Seal’s drug enterprise provided the perfect cover for the illicit resupply missions. Seal’s planes would fly from Mena to Medellin cartel airstrips in the mountains of Colombia and Venezuela, make refueling stops in Panama and Honduras, and then return to Mena, where the planes would drop parachute-equipped duffel bags loaded with cocaine over Seal-controlled farms near Mena. Seal’s men would retrieve the drugs in pickup trucks and deliver them to the cartel’s distributors in New Orleans, Miami and New York. Each flight packed between 200 to 500 kilos of cocaine, a load that would then fetch about $13 million on the street. By the early 1980s Seal’s planes were making several flights a week.

In 1982, the CIA approached Seal about adding a new element to his flight plans. They wanted him to carry loads of supplies and guns on his trips to Central America. The quid pro quo seemed clear enough to Seal. If he would consent to help the US intelligence agencies, they would once again act as his protectors, keeping his planes from being hassled by US customs and the DEA. In addition, the CIA agreed to outfit Seal’s squadron of planes with the latest in high-tech aviation electronics. The CIA was familiar with at least some of Seal’s aircraft, which by then included a Learjet, several helicopters and some large cargo planes, because many of them had been bought from CIA proprietaries, such as Air America and Southern Air Transport. The deal seemed to pay off for Seal. In the early 1980s, the US Customs Service backed off a drug investigation into one of Seal’s pilots. In a memo to his superiors, a Customs agent noted, “Joe [name redacted] works for Seal and cannot be touched because Seal works for the CIA.”

Some of the weapons Seal’s plane flew to the Contra camps were manufactured by a Fayetteville, Arkansas gunmaker named William Holmes. Holmes specialized in the production of automatic pistols mounted with silencers, a weapon of choice for CIA executive actions.

Holmes, who had been making guns for the CIA since the mid-1950s, testified in a federal court case that the Agency asked him to make 250 of the weapons for Seal. He later described Seal as “the ramrod of the Mena gun deal.”

In 1983, Seal’s luck with law enforcement seemed to run out. The DEA nailed him for smuggling 200,000 Quaaludes into a Fort Lauderdale airport, as part of a sting called Operation Screamer. After his indictment, Seal approached the DEA and offered his services as an informant. The DEA turned him down. Seal was convicted in February 1984 and faced the possibility of spending the next ten years in federal prison. Desperate to retain his freedom, Seal, apparently on the advice of his contacts in the CIA, made one last call, this time to Vice President George Bush’s drug task force. The drug runner was swiftly granted an appointment. He fired up his Learjet and flew to Washington, D.C., where he met with a Bush staffer named Jim Howell. Howell, a former drug agent at US Customs, interviewed Seal and then took him to see a top DEA agent named Kenneth Kennedy. Howell vouched for Seal, and Seal complained bitterly that the DEA agents in Fort Lauderdale had brushed him off for personal reasons. Although the official position of the DEA was that Seal offered to help the agency gain information on the Medellin cartel, Kennedy recalls that Seal also boasted that he could help the Reagan administration expose the Sandinistas’ role in the drug trade. Kennedy told a congressional committee that Seal informed him at their initial meeting that “officials of the Nicaraguan government are involved in smuggling cocaine into the United States, specifically the Sandinistas.” Kennedy said that Seal promised to fly to Nicaragua, pick up loads of cocaine and bring them back to the United States.

Kennedy referred Seal to two Miami-based DEA agents, Ernst Jacobsen and Robert Joura. “After he was debriefed in Washington, a phone call was made to Group Six in the Miami Field Division,” Jacobsen said in testimony before the House Judiciary Committee in 1989. “We were asked if I wanted to work with Mr. Seal. I said I would.”

Seal flew to Miami the next day, where he met with Joura, Jacobsen and Steve LeClair, an attorney with the US Justice Department. Seal told the DEA men that he could easily set up a delivery of 3,000 kilos of cocaine from Jorge Ochoa’s operation in Colombia. After this meeting, Seal was officially signed up as a confidential informant for the DEA: his DEA ID number was SGI-84-0028. The DEA agreed to pay him $800,000 a year for his services and postponed his sentencing on the Quaalude-smuggling conviction.

A few days later Seal called two of the Medellin cartel’s top operatives in Miami, Felix Dixon Bates and Carlos “Lito” Bustamante, to let them know that he was back in business. Bustamante oversaw the distribution of Medellin cocaine in the US. Bates was a long-time pilot for the Ochoa network who specialized in smuggling exotic animals to Jorge Ochoa’s ranch in Colombia. Bustamante told Seal that Ochoa wanted him to ferry a Titan 404 plane from Miami to Medellin. Seal agreed to the plan and on April 4, 1984, he and Bates flew to Colombia. They were met at the airstrip by Jorge Ochoa. Precisely what happened at this meeting is the subject of some controversy. DEA agents Joura and Jacobsen claim that it was at this session that the subject of Nicaragua first came up. They say that Ochoa told Seal that the cartel was moving most of its operations to Nicaragua because of increasing pressures on them in Colombia. This scenario seems far-fetched for a number of reasons, not least because at that time the cartel seemed to be operating with near impunity in Colombia, Panama, Honduras and Costa Rica. An alliance with the Sandinistas would only antagonize the US government, which the cartel was trying so hard to placate.

A more likely story is that Seal and Ochoa used this meeting to plan a sting operation against the Sandinistas designed to keep Seal out of prison and ensure the Medellin cartel the continued good graces of the US intelligence and law enforcement agencies.

Over the next week, Seal visited Panama and Guatemala before returning to Miami, where he conferred with Bustamante and other US representatives of the Medellin cartel. They set up plans for a series of drug flights from Colombia and Panama to Miami, and Seal invited the Colombians to come with him to Mena to inspect the planes that Seal was planning to use for the cocaine flights. The next day Seal flew four Colombians to Mena, where he treated the drug dealers to a lunch of Cajun food and took them for a spin in his new Lockheed Lodestar jet. The Colombians were duly impressed and gave the green light for the drug flights to begin.

The following day Seal relayed the plans to DEA agent Jacobsen, who got approval from the Colombian government for Seal to enter the country and pick up a load of cocaine. Before taking off for Colombia, Seal took the opportunity to make two trips to his bank in the Bahamas, where he deposited several hundred thousand dollars in cash.

A week before Seal was scheduled to fly to Medellin, he blew out an engine on his Learjet during a test run. The DEA paid to have the plane repaired. In the meantime, a DEA agent named S.B. Billbough passed on to the CIA Seal’s contention that the Ochoa organization was preparing to move its base of operations to Nicaragua. According to a memo prepared by DEA agent Joura, the CIA expressed “considerable interest” in the Seal operation.

With his Learjet still in the repair hangar, Seal flew to Panama City on May 18 for a meeting with the equivalent of the board of directors of the Medellin cartel. At the session were Jorge Ochoa, his brother Fabio Ochoa, Pablo Escobar, Bates, and Gonzalo Rodriguez Gacha. Seal arranged to trade one of his helicopters (previously owned by a CIA front) for a Merlin 3B owned by the cartel. It was also at this session that Seal said he was introduced to the mysterious figure of Frederico Vaughn.

The CIA would later claim that Vaughn was a “close associate” of the Sandinistas’ interior minister, Tomas Borge. But Vaughn has long been suspected of having his own ties to the CIA. His cousin Barney Vaughn worked for the Popular Bank and Trust Company, once owned by Nicaraguan dictator Anastasio Somoza. The bank was also used by the CIA and Oliver North’s operation to funnel money to the Contras. In addition, a telephone number Seal later claimed to be Vaughn’s Managua home number turned out to be a line used by US intelligence assets from 1981 to 1986. The Sandinistas claimed that Vaughn had worked as an assistant manager of an import/export company in the capital after the revolution, but had left Nicaragua for Panama in 1983.

Seal said that he and Vaughn flew the next day on Copa Airlines to Managua, where Vaughn showed the pilot the 3,000-foot Los Brasiles airstrip northwest of Managua. Vaughn, Seal said, also pointed out the location of Sandinista anti-aircraft guns stationed throughout the capital. Seal spent the night at Vaughn’s house and returned to Florida the next day, just in time for his long-delayed sentencing hearing in Fort Lauderdale on his Quaalude-smuggling conviction.

Seal was sentenced to ten years, but because of his cooperation in the drug operation the sentence was reduced to six months’ probation. Federal Judge Norman Roettinger, a law-and-order conservative who had received letters on Seal’s behalf from the DEA and the CIA, praised Seal for his work undermining the Sandinista regime.

These problems behind him, Barry Seal was cleared for his first DEA-sanctioned cocaine run. On May 28, Seal and his longtime copilot Emile Camp took of from Mena’s Intermountain Regional Airport in Seal’s retooled Lockheed Lodestar jet bound for Colombia. They arrived at a small airstrip in the mountains outside Medellin in a driving rainstorm that turned the dirt runway into a strip of mud. Seal nearly wrecked the plane on landing when the jet slid off the runway and into a ditch. The plane suffered damage to its landing gear and Seal was forced to run the return flight in a smaller plane owned by the Medellin cartel. This plane was the same Titan 404 that Seal and Bates had delivered to Medellin a month earlier. According to Seal, senior cartel executive Carlos Lehder himself was at the airstrip to meet his plane. From astride a white Arabian stallion, Lehder supervised a team of Indians who loaded the Titan with more than a tone of cocaine.

The smaller plane’s limited range, Seal claimed, forced him to stop in Nicaragua for refueling. He landed at los Brasiles airport, where he and Camp were greeted by Frederico Vaughn. The plane was quickly refueled and took off for Miami. But almost immediately, Seal told his DEA handlers, his plane was struck by anti-aircraft fire and he was forced to crash-land the plane at the Managua airport. One of Vaughn’s associates arrived in a military-style truck and took the cocaine away for safekeeping. Seal and Camp were detained overnight by the Nicaraguan police. But once again, Seal said, in his thoroughly bizarre narrative of this episode, Vaughn came to the rescue, arranging their release from jail and providing them with a new plane to fly back to Florida. Seal claimed that this plane belonged to Pablo Escobar. Vaughn assured Seal that he would safeguard the cocaine until Seal could come back for it.

Seal arrived back in Miami and told his astounding tale to Joura and Jacobsen. Far from being a disaster, Seal told the DEA men, this created a great opportunity to move against the Sandinistas. Plans were swiftly made by the DEA and CIA for a return flight to Nicaragua. The first order of business was to get Seal a new plane. On June 10, Seal traded his Merlin 3B, recently acquired from Jorge Ochoa, for a C-123K military cargo plane owned by a CIA contractor. Before it could be flown, however, the C-123K needed structural repairs and engine work. DEA agent Jacobsen arranged for the Pentagon to have the planed shipped to Rickenbacker Air Force Base outside Columbus, Ohio, where Air Force mechanics performed $40,000 worth of free work on Seal’s plane. After the repairs were completed, the cargo plane was flown to Homestead Air Force Base outside Miami, where CIA technicians installed two hidden cameras, one in the plane’s nosecone and the other in the rear cargo hold. The cameras were rigged so that Seal could use a remote control button hidden in his pocket to snap photos at will.

On the morning of June 25, Seal, Camp and their mechanic, Peter Everson, landed the C-123K at Los Brasiles airstrip. Although the CIA and President Reagan would refer to los Brasiles as a military airbase, it was in fact a civilian runway used primarily by crop-dusters and other agricultural aircraft. Seal claimed that the plane was met by Frederico Vaughn, Pablo Escobar, Gonzalo Rodriguez Gacha and some Nicaraguan soldiers, who helped carry more than 1,200 pounds of cocaine stuffed in duffel bags from a hangar into a the rear of the plane. Seal clicked off a set of grainy and indistinct photos of the drug transfer.

The plane took off about an hour later, after taking on about 2,000 gallons of fuel. The next morning Seal landed his C-123K, nicknamed the Fat Lady, at Homestead Air Force Base, where the DEA took control of the cocaine and CIA agents rushed Seal’s roll of film off to be developed. In the Agency’s photo labs.

Shortly after Seal returned to Florida, Ron Caffery, the head of the DEA’s cocaine desk in Washington, D.C., received a call from his boss, David Westrate, assistant administrator of the DEA. Westrate instructed Caffery to brief members of the National Security Council and the CIA on Seal’s mission. The next day Caffery met with Oliver North and CIA agent Dewey Clarridge at the Old Executive Office Building adjacent to the White House. He showed North and Clarridge blowups of Seals’ photos and identified pictures of Seal, Camp, Vaughn and Escobar. But Caffery was surprised to discover that both North and Clarridge were already well-acquainted with the photos. Caffrey recalled being somewhat unaware of Vaughn’s background, but noticed that Clarridge seemed to be packing a dossier on the man. “The CIA representative told me that he [Vaughn] was an associate of a government officer, of the Nicaraguan government, which was news to me,” Caffrey told a congressional committee looking into the Seal affair.

The discussion between North, Clarridge and the DEA man rapidly turned to planning a new sting involving Seal. They decide that Seal should be sent back to Nicaragua with $1.5 million in DEA cash, along with assorted “toys” for Escobar and Vaughn, to arrange a new drug deal. At this point, Oliver North suggested that perhaps Seal could arrange a deal outside Nicaragua, so that Vaughn and Escobar could be arrested and the $1.5 million be turned over to the Contras. Caffery told North that the US Attorney’s office would never countenance such a scheme. Then North suggested that perhaps it was time for the DEA to go public with Seal’s photos. North told Caffrey that “there was an important vote coming up on an appropriations bill to fund the Contras” and that information on Sandinista drug dealing could swing the vote in the administration’s favor.

Again Caffery shot down North’s idea. He told North that release of any information on the Nicaragua flight would jeopardize their investigation of the Medellin cartel and place Seal’s life at risk. But the information was already beginning to leak out as part of the Reagan administration’s propaganda campaign to demonize the Sandinistas. On June 27, General Paul Gorman, head of the Pentagon’s Southern Command, made an anti-Sandinista speech at a meeting hosted by the American Chamber of Commerce in El Salvador. Gorman claimed to have proof that the Sandinista leadership was involved in drug smuggling.

This exposure, however, didn’t stop the DEA from sending Seal back to Nicaragua for another cocaine buy on July 7. The deal was apparently aborted at the last minute, when, Seal said, he was warned that the Sandinistas had learned about the mission.

By now the NSC and CIA were leaking reports of Seal’s Nicaraguan exploits to their friends in the Washington press corps. The Washington Times, in a July 17, 1984 front page story by Edmond Jacoby, was the first to report on “evidence” of Sandinista drug trafficking. But Oliver North’s diaries reveal that other reporters were also hot for the story. One of the first to lunge at the bait was Doyle McManus, the Los Angeles Times writer who savaged Gary Webb. In North’s July 17 entry he wrote: “McManus, LA Times says NSC resource claims WH [White House] has pictures of Borge loading cocaine in Nic.” McManus’s source was dead wrong, of course. Borge had been nowhere near the Seal plane.

Within weeks all the major national papers and news magazines were running stories quoting “high-level” sources in the US government who claimed that they had hard evidence that the Sandinista leadership was “actively participating” in the drug trade. The two names most often cited in the stories were Borge and Defense Minister Humberto Ortega, brother of the president of Nicaragua, Daniel Ortega.

On September 7, with the Contra aid vote fast approaching, Senator Paula Hawkins, a right-wing Republican from Florida, convened a press conference in Washington at which she attacked the Sandinistas as “a brutal regime financed by the drug trade.” Hawkins unveiled to the press four obscure photos taken on Seal’s June 25 mission. She also displayed a high-altitude photo of Los Brasiles “military airbase” taken by an American U-2 spy plane. The photos were not released to the press, but her press conference put the story on the front page once again.

By now Barry Seal’s cover as a secret drug agent was completely blown and he went back to what he did best, running drugs and guns. Fortunately for Seal, Congress was not persuaded to renew Contra funding in the fall of 1984 and instead enacted the Boland amendment prohibiting any direct military aid. This meant Seal still had a job shuttling lethal contraband for North’s network from Mena to El Salvador, Honduras and Nicaragua. An Arkansas police officer investigating Seal’s operation in August 1985 wrote in his report: “Every time Bari [sic] Seal flies a load of dope for the US govt., he flies two for himself.”

In late December 1984, Seal was caught flying a load of marijuana into Louisiana. He was released the next day after he posted a $250,000 cash bond. Seal made a call to his friends in the DEA, and on January 7 he was interviewed by Special Agent Dale Hahn of the FBI. According to Hahn’s notes, Seal offered to testify against low-level members of the Medellin cartel in exchange for a guilty plea and light sentence on the marijuana-trafficking charges. Over the next year, Seal testified in three major drug cases, helping the feds secure convictions. Seal was eventually sentenced to a six-month term in a halfway house in Baton Rouge. Shortly after Seal’s arrest in Louisiana, his old friend and co-pilot Emile Camp died when his Seneca plane, equipped with state-of-the-art navigational equipment, slammed into a mountain near Mena. Many of Camp’s associates believe that his plane had been sabotaged and point out that he was one of the few to witness many of Seal’s activities for the CIA and DEA.

In the summer of 1985, Seal decided to sell his C-123K cargo plane for $250,000. The buyer was the same CIA contractor, Harold Doan, from whom Seal had acquired the plane a year earlier. The plane later ended up in the service of Oliver North’s Contra resupply program and entered aviation history on October 3, 1986, when it was shot down over Nicaraguan air space and its cargo kicker, Eugene Hasenfus, was taken into custody by the Sandinistas and paraded before the world as living proof of the Reagan administration’s war against their country.

Although supposedly in a witness protection program, Seal said he considered himself “a clay pigeon.” He was eventually tracked down by a team of assassins working for Jorge Ochoa and Pablo Escobar. On February 19, 1986, Seal’s body was riddled with hundreds of bullets as he sat in his whit Cadillac outside the Salvation Army Center in Baton Rouge.

After Seal’s death, IRS agents examined his bank records. They determined his estate owed more than $86 million in back taxes, but ended up forgiving much of the debt, citing Seal’s “CIA-DEA employment.”


By the mid-1980s, Arkansas was an important staging post in the Contra War against Nicaragua being run from Washington. One scheme for maintaining a cover-up for Oliver North’s network was, it appears, played out in the Governor’s Mansion in Little Rock, Arkansas occupied by a young Bill Clinton.

Among the occupants of that same mansion was buddy Young, the man in charge of Clinton’s security. According to court documents filed by Terry-Reed, a former CIA asset involved in North’s Contra resupply effort, Young was a pivotal figure in a case designed to land Reed in prison not long after Reed had walked out of an arms-for-drugs operation in Guadalajara, Mexico, where he had been working with CIA man Felix Rodriguez.

Arkansas’s role in the Contra War and in an arms-for-drugs supply network goes back to the early 1980s and the airport at Mena. A federal investigation aided by the Arkansas State Police established that Barry Seal had his planes refitted at Mena for drug drops, trained pilots there and laundered his profits partly through financial institutions in Arkansas. Seal at this time was in close contact with North, who acknowledged the relationship in his notebooks and his memoir.

Among those recruited by North was-so the man subsequently asserted in court papers-Terry Reed, formerly with Air America in Thailand. Reed says he was working for North in 1983. North put Reed in touch with a Seal, and by 1984 Reed had established a base at the hamlet of Nella, ten miles north of Mena in Ouachita National Forest. There Nicaraguan Contras and other recruits from Latin America were trained in resupply missions, night landings, precision airdrops and similar maneuvers. Reed, familiar with the commercial affairs of Mena, asserts that large sums of drug money were being laundered through leading Arkansas bond brokers, an allegation also being considered by a federal investigator just as his researches were abruptly terminated.

One of Reed’s contacts in North’s network was William Cooper, another Air America veteran then working for Southern Air Transport. Cooper was at the controls of the C-123K once owned by Seal that was shot down by a Sandinista soldier in October 1986. That plane had been serviced at Mena. Cooper died in the crash. His crewman, Eugene Hasenfus, survived.

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