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Includes supporting documentation and testimony.

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 War on drugs has unequal impact on black Americans

 Contra case illustrates the discrepancy: Nicaraguan goes free; L.A.
 dealer faces life

 Published: Aug. 20, 1996                                    [Other stories]

 BY GARY WEBB                                                Flawed
 Mercury News Staff Writer                                   sentencing
                                                             the main
 FOR THE LAST YEAR and a half, the U.S. Department of        reason for
 Justice has been trying to explain why nearly everyone      race
 convicted in California's federal courts of ''crack''       disparity
 cocaine trafficking is black.                               In 1993,
                                                             crack
 Critics, who include some federal court judges, say it      smokers got
 looks like the Justice Department is targeting crack        3 years;
 dealers by race, which would be a violation of the U.S.     coke
 Constitution.                                               snorters got
                                                             3 months
 Federal prosecutors, however, say there's a simple, if
 unpleasant, reason for the lopsided statistics: Most        San
 crack dealers are black.                                    Francisco
                                                             Bay Area man
 ''Socio-economic factors led certain ethnic and racial      tangled in
 groups to be particularly involved with the distribution    drug web
 of certain drugs,'' the Justice Department argued in a      Tales to DEA
 case in Los Angeles last year, ''and blacks were            of gun
 particularly involved in the Los Angeles area crack         running,
 trade.''                                                    drug
                                                             trafficking
                                                             fall on deaf
                                                             ears

 But why -- of all the ethnic and racial groups in
 California to pick from -- crack planted its deadly roots
 in L.A.'s black neighborhoods is something only Oscar
 Danilo Blandon Reyes can say for sure.

 Danilo Blandon, a yearlong Mercury News investigation
 found, is the Johnny Appleseed of crack in California --
 the Crips' and Bloods' first direct-connect to the
 cocaine cartels of Colombia. The tons of cut-rate cocaine
 he brought into black L.A. during the 1980s and early
 1990s became millions of rocks of crack, which spawned
 new crack markets wherever they landed.

 On a tape made by the Drug Enforcement Administration in
 July 1990, Blandon casually explained the flood of
 cocaine that coursed through the streets of South-Central
 Los Angeles during the previous decade.

 ''These people have been working with me 10 years,''         [audio link]
 Blandon said. ''I've sold them about 2,000 or 4,000
 (kilos). I don't know. I don't remember how many.''
                                                                  1990
 ''It ain't that Japanese guy you were talking about, is      conversation
 it?'' asked DEA informant John Arman, who was wearing a      between John
 hidden transmitter.                                           Arman and
                                                              Oscar Danilo
 ''No, it's not him,'' Blandon insisted. ''These ... these      Blandon
 are the black people.''                                      [Image] 78K
                                                                  AIFF
 Arman gasped. ''Black?!''                                    [Image] 233K

 ''Yeah,'' Blandon said. ''They control L.A. The people           WAV
 (black cocaine dealers) that control L.A.''
                                                              [audio link]
 U.S. has paid Blandon more than $166,000
                                                                Blandon
 But unlike the thousands of young blacks now serving long     discusses
 federal prison sentences for selling mere handfuls of the    his contacts
 drug, Blandon is a free man today. He has a spacious new      with Arman
 home in Nicaragua and a business exporting precious          Note: Strong
 woods, courtesy of the U.S. government, which has paid         language
 him more than $166,000 over the past 18 months, records        used in
 show -- for his help in the war on drugs.                      excerpt.
                                                              [Image] 103K
 That turn of events both amuses and angers ''Freeway
 Rick'' Ross, L.A.'s premier crack wholesaler during much         AIFF
 of the 1980s and Danilo Blandon's biggest customer.          [Image] 308K
                                                                  WAV
 ''They say I sold dope everywhere but, man, I know he
 done sold 10 times more dope than me,'' Ross said with a     [audio link]
 laugh during a recent interview.
                                                              More of the
                                                              conversation
                                                                between
                                                               Arman and
                                                                Blandon
                                                              [Image] 86K
                                                                  AIFF
                                                              [Image] 260K
                                                                  WAV

                                                             [document link]
                                                              Confirmation
                                                              of Blandon's
                                                              identity as
                                                              an informant

 Nothing epitomizes the drug war's uneven impact on black
 Americans more clearly than the intertwined lives of
 Ricky Donnell Ross, a high school dropout, and his suave
 cocaine supplier, Danilo Blandon, who has a master's
 degree in marketing and was one of the top civilian
 leaders in California of an anti-communist guerrilla army
 formed by the U.S. Central Intelligence Agency. Called
 the Fuerza Democratica Nicaraguense (FDN), it became
 known to most Americans as the Contras.

 In recent court testimony, Blandon, who began dealing        [audio link]
 cocaine in South-Central L.A. in 1982, swore that the
 first kilo of cocaine he sold in California was to raise
 money for the CIA's army, which was trying on a              Oscar Danilo
 shoestring to unseat Nicaragua's new socialist Sandinista      Blandon
 government.                                                   testifies
                                                                about a
 After Blandon crossed paths with Ross, a South-Central       conversation
 teen-ager who had the gang connections and street smarts     he had with
 necessary to move the army's cocaine, a veritable               Norwin
 blizzard engulfed the ghettos.                                 Meneses
                                                              [Image] 74K
 Former Los Angeles Police narcotics detective Stephen W.         AIFF
 Polak said he was working the streets of South-Central in    [Image] 224K
 the mid-1980s when he and his partners began seeing more
 cocaine than ever before.                                        WAV

 ''A lot of detectives, a lot of cops, were saying, hey,
 these blacks, no longer are we just seeing gram dealers.
 These guys are doing ounces; they were doing keys,''
 Polak recalled. But he said the reports were pooh-poohed
 by higher-ups who couldn't believe black neighborhoods
 could afford the amount of cocaine the street cops
 claimed to be seeing.

 ''Major Violators (the LAPD's elite anti-drug unit) was
 saying, basically, ahh, South-Central, how much could
 they be dealing?'' said Polak, a 21-year LAPD veteran.
 ''Well, they (black dealers) went virtually untouched for
 a long time.''

 It wasn't until January 1987 -- when crack markets were
 popping up in major cities all over the U.S. -- that law
 enforcement brass decided to confront L.A.'s crack
 problem head-on. They formed the Freeway Rick Task Force,
 a cadre of veteran drug agents whose sole mission was to
 put Rick Ross out of business. Polak was a charter
 member.

 ''We just dedicated seven days a week to him. We were
 just on him at every move,'' Polak said.

 Ross, as usual, was quick to spot a trend. He moved to
 Cincinnati and quietly settled into a home in the woodsy
 Republican suburbs on the east side of town.

 ''I called it cooling out, trying to back away from the
 game,'' Ross said. ''I had enough money.''

 His longtime supplier, Blandon, reached an identical
 conclusion around the same time. A massive police raid on
 his cocaine operation in late 1986 nearly gave his wife a
 nervous breakdown, he testified recently, and by the
 summer of 1987 he was safely ensconced in Miami, with
 $1.6 million in cash.

 Some of his drug profits, records show, were invested in
 a string of rental car and export businesses in Miami,
 often in partnership with an exiled Nicaraguan judge
 named Jose Macario Estrada. Like Blandon, the judge also
 worked for the CIA's army, helping FDN soldiers and their
 families obtain visas and work papers in the United
 States. Estrada said he knew nothing of Blandon's drug
 dealings at the time.

 Blandon invested in four-star steak house

 Blandon also bought into a swank steak-and-lobster
 restaurant called La Parrilla, which became a popular
 hangout for FDN leaders and supporters. The Miami Herald
 called it the ''best Nicaraguan restaurant in Dade
 County'' and gave it a four-star rating, its highest.

 But neither Ross nor Blandon stayed ''retired'' for long.

 A manic deal-maker, Ross found Cincinnati's virgin crack
 market too seductive to ignore. When he left Los Angeles,
 the price of a kilo was around $12,000. In the Queen
 City, Ross chuckled, ''keys was selling for $50,000. It
 was like when I first started.''

 Plunging back in, the crack tycoon cornered the
 Cincinnati market using the same low-price, high-volume
 strategy -- and the same Nicaraguan drug connections --
 he'd used in L.A. Soon, he was selling crack as far away
 as Cleveland, Indianapolis, Dayton and St. Louis.

 ''There's no doubt in my mind crack in Cincinnati can be
 traced to Ross,'' police officer Robert Enoch told a
 Cincinnati newspaper three years ago.

 But Ross' reign in the Midwest was short-lived. In 1988,
 one of his loads ran into a drug-sniffing dog at a New
 Mexico bus station and drug agents eventually connected
 it to Ross. He pleaded guilty to crack trafficking
 charges and received a mandatory 10-year prison sentence,
 which he began serving in 1990.

 In sunny Miami, Blandon's retirement plans also had gone
 awry. His 24-city rental car business collapsed in 1989
 and later went into bankruptcy. To make money, he
 testified, he came to the Bay Area and began brokering
 cocaine again, buying and selling from the same
 Nicaraguan dealers he'd known from his days with the FDN.
 In 1990 and 1991, he testified, he sold about 425 kilos
 of cocaine in Northern California -- $10.5 million worth
 at wholesale prices.

 But unlike before, when he was selling cocaine for the
 Contras, Blandon was constantly dogged by the police.

 Twice in six months he was detained, first by Customs
 agents while taking $117,000 in money orders to Tijuana
 to pay a supplier, and then by the LAPD in the act of
 paying one of his Colombian suppliers more than $350,000.

 The second time, after police found $14,000 in cash and a
 small quantity of cocaine in his pocket, he was arrested.
 But the U.S. Justice Department -- saying a prosecution
 would disrupt an active investigation -- persuaded the
 cops to drop their money laundering case.

 Soon after that, Blandon and his wife, Chepita, were
 called down to the U.S. Immigration and Naturalization
 Service office in San Diego on a pretense and scooped up
 by DEA agents, on charges of conspiracy to distribute
 cocaine. They were jailed without bond as dangers to the
 community and several other Nicaraguans were also
 arrested.

 Blandon's prosecutor, L.J. O'Neale, told a federal judge
 that Blandon had sold so much cocaine in the United
 States his mandatory prison sentence was ''off the
 scale.''

 Then Blandon ''just vanished,'' said Juanita Brooks, a
 San Diego attorney who represented one of Blandon's
 co-defendants. ''All of a sudden his wife was out of jail
 and he was out of the case.''

 The reasons were contained in a secret Justice Department   [document link]
 memorandum filed in San Diego federal court in late 1993.     Motion for
                                                                downward
 Prosecutor found Blandon 'extraordinarily valuable'           departure
                                                                  from
 Blandon, prosecutor O'Neale wrote, had become                 sentencing
 ''extraordinarily valuable in major DEA investigations of    guidelines
 Class I drug traffickers.'' And even though probation
 officers were recommending a life sentence and a $4
 million fine, O'Neale said the government would be
 satisfied if Blandon got 48 months and no fine. Motion
 granted.

 Less than a year later, records show, O'Neale was back      [document link]
 with another idea: Why not just let Blandon go? After         Motion for
 all, he wrote the judge, Blandon had a federal job           reduction of
 waiting.                                                     sentence for
                                                              Oscar Danilo
 O'Neale, saying that Blandon ''has almost unlimited            Blandon
 potential to assist the United States,'' said the
 government wanted ''to enlist Mr. Blandon as a full-time,
 paid informant after his release from prison.''

 And since it would be hard to do that job with parole
 officers snooping around, O'Neale added, the government
 wanted him turned loose without any supervision. Motion
 granted. O'Neale declined to comment.

 After only 28 months in custody, most of it spent with
 federal agents who debriefed him for ''hundreds of
 hours,'' he said, Blandon walked out of the Metropolitan
 Correctional Center in San Diego, was given a green card
 and began working on his first assignment: setting up his
 old friend ''Freeway Rick'' for a sting operation.

 Targeted for a sting while sitting in prison                [document link]
                                                                  1994
 Records show Ross was still behind bars, awaiting parole,     statement
 when San Diego DEA agents targeted him for a ''reverse''      regarding
 sting -- one in which government agents provide the drugs     Ricky Ross
 and the target provides the cash. The sting's author, DEA     and Danilo
 agent Chuck Jones, has testified that he had no evidence       Blandon
 Ross was dealing drugs from his prison cell, where he'd
 spent the past four years.                                  [document link]
                                                               Grand jury
 But during his incarceration Ross did something that, in     testimony by
 the end, may have been even more foolhardy: He testified      DEA agent
 against Los Angeles police officers, as a witness for the    Chuck Jones
 U.S. government.

 Soon after Ross went to prison for the Cincinnati bust,
 federal prosecutors from Los Angeles came to see him,
 dangling a tantalizing offer. A massive scandal was
 sweeping the L.A. County sheriff's elite narcotics
 squads, and among the dozens of detectives fired or
 indicted for allegedly beating suspects, stealing drug
 money and planting evidence were members of the old
 Freeway Rick Task Force.

 If Ross would testify about his experiences, he was told,
 it could help him get out of jail.

 In 1991, he took the stand against his old nemesis, LAPD
 detective Steve Polak, who eventually pleaded guilty to a
 misdemeanor charge of excessive use of force and retired.
 But the deal Ross got from federal prosecutors for
 testifying -- five years off his sentence and an
 agreement that his remaining drug profits would not be
 seized -- galled many.

 ''Ross will fall again someday,'' Polak bitterly told a
 Los Angeles Times reporter in late 1994.

 By then, the trip wires were already strung.

 Within days of Ross' parole in October 1994, he and
 Blandon were back in touch and their conversation quickly
 turned to cocaine. It was almost like old times, except
 that Ross was now hauling trash for a living. He was also
 behind on his mortgage payments for an old theater he
 owned in South-Central, which he was trying to turn into
 a youth academy.

 According to tapes Blandon made of some of their             [Photo link]
 discussions, Ross repeatedly told Blandon that he was         Drugs used
 broke and couldn't afford to finance a drug deal. But          in DEA's
 Ross did agree to help his old mentor, who was also          bust (15K)
 pleading poverty, find someone else to buy the 100 kilos
 of cocaine Blandon claimed he had.

 Drug-laden vehicle was a trap for Ross

 On March 2, 1995, in a shopping center parking lot in
 National City, near San Diego, Ross poked his head inside
 a cocaine-laden Chevy Blazer and the place exploded with
 police.

 Ross jumped into a friend's pickup and zoomed off            [Photo link]
 ''looking for a wall that I could crash myself into,'' he    Ross' truck
 said. ''I just wanted to die.'' He was captured after the     at time of
 truck careened into a hedgerow and has been held in jail     his capture
 without bond since then.                                      by the DEA
                                                                 (13K)
 Ross' arrest netted Blandon $45,500 in government rewards
 and expenses, records show. On the strength of Blandon's
 testimony, Ross and two other men were convicted of
 cocaine conspiracy charges in San Diego last March --
 conspiring to sell the DEA's cocaine. Sentencing is set
 for Aug. 23. Ross is facing a life sentence without the
 possibility of parole. The other men are looking at 10-
 to 20- year sentences.

 Acquaintances say Blandon, who refused repeated interview
 requests, is a common sight these days in Managua's
 better restaurants, drinking with friends and telling of
 his ''escape'' from U.S. authorities.

 According to his Miami lawyer, Blandon spends most of his
 time shuttling between San Diego and Managua, trying to
 recover Nicaraguan properties he left behind in 1979,
 when the socialists seized power and sent him running to
 the United States.

 ----------------------------------------------------------
 Additional reporting for this series in Nicaragua and
 Costa Rica was done by Managua journalist Georg Hodel.
 Research assistance at the Nicaraguan Supreme Court was
 performed by journalist Leonore Delgado.

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