Hitz was the Inspector General of the Central Intelligence Agency from 1990 to 1998. He conducted a thorough investigation into charges that the CIA participated in drug trafficking in Central America in the 1980s. A declassified version of his report was released in 1998.

In terms of individual CIA officers and the institution itself, there was no direct involvement in cocaine and drug running and drug trafficking. That was the central point of our findings. What we did find in the context of the Contra involvement, was that there was an inconsistency in guidelines given to the field to deal with drug allegations [involving] some of the individuals with whom we were working.

Your report describes a memorandum of understanding between the attorney general [Smith] and DCI William Casey in 1982. Why did they put that [the memorandum] together, and why did it fail to mention narcotics?

We weren't ever able to find a memorandum of conversation or any evidence that indicated why it was done.

But the issue was...if the agents or assets had been defined as employees, then allegations of drug use, if they were deemed creditworthy, would have to have been reported to the Department of Justice. It would have increased the ambit of responsibility, I suppose, of operating officers in the field...

Now the principal purpose of CIA officers serving in the field was to aid the contra movement, to make sure that the anti-Sandinista forces stayed alive during the period under U.S. law that that support was legal.

So perhaps what was in the mind of Casey and Smith, although one doesn't know, was that if you are broadening the responsibility of officers in the field so far that they have to begin to worry about [reporting] people...they wouldn't perform their principal job, which was to collect information about the Contra movement and to help it insofar as they could.

But according to this letter they would have to report criminal activity by the people in the field they might be dealing with?

Yes, and it's a good point. Because on the one hand, the exception is carved out from the regulation that indicates that for purposes of reporting crimes, agents--people working for CIA officers in the field--are not to be considered as employees.

There is a [follow-up] letter from Attorney General Smith to the agency saying, "But that doesn't forgive...the responsibility of your officers in the field to report criminal activity when they encounter it." So it was a mixed message. But [that letter] didn't have the effect of regulation. The letter was there, but it was almost as if it was in a court opinion, dicta.

I'm a CIA officer in the field dealing with the contras in the early to mid-1980s, and I need an airline to haul supplies and weapons to these contras in the field. And somebody tells me, "This is the best airline to use, but by the way, they also smuggle drugs." What's my responsibility?

Well, taking your example, if it were as clear as that, it seems to me absolutely the CIA officer in the field can't use that airline, if it's known as an airline that smuggles drugs. But the point is the situation is never that clear. And throughout this whole period there were allegations that X or Y, involved with one side of the struggle or another, was running drugs. Nicaragua was on the main route of entry of drugs from Latin America into the United States, so these allegations were made all the time. The question was how credible were they? And who made them?

And what we found in our study was that there was a failure consistently to deal with those allegations in a set manner. Were they going to disregard them altogether? Were they going to check on the veracity of the person making the allegation? Were they going to adopt a rule whereby [they would no longer work with] certain persons about whom these allegations were made? No consistent pattern was followed.

...The important point is this: it was fairly clear...if drugs were intermixed with this program, it would fail; it would kill it. They knew perfectly well because of past accusations in previous theaters, that that would be the kiss of death... So anybody with an instinct for self-preservation would have realized it made sense to be alert to that kind of problem...

And the question then becomes: what does the officer who is in receipt of that information do to follow it up, to find out whether it's true or not... And we thought, from the standpoint of looking at it with 20-20 hindsight, that there should have been an established procedure to deal with matters of that kind, because it was so clear that it would have a detrimental effect on the whole program if it were found that drug running was an integral part of what was taking place down there...

But what you're saying is, there was no administrative or regulation or instruction from Washington?

To be specific about it there was no directorate of operations instruction about how to deal with drug allegations during the whole period of the contra cocaine effort. They were in process. They were working on some kind of guidance. But they never published it in black letter and sent it to the field. That's part of what we considered to be a failure in guidance from headquarters, which we are fairly critical of in the report...

[Were the Contras involved in drug trafficking?]

I think I'd have to address specific cases. And certainly there were accusations with respect to the leadership in the very beginning... But I think the...more realistic example [is] are the hangers-on, are the support people...are they doing the drug running?

Now there came a time during this whole period when, with the Congress investigating this matter in '86 and '87, an instruction came from the acting director of Central Intelligence, Robert Gates specifically, to pay attention to these kinds of support people who might be involved in the effort. That instruction went down to the directorate of operations. And we found that there was no specific reaction to that instruction in the sense of cables to the field or regulations framed so that ordinary...case officers could know what to do...

Isn't it a felony for an employee of the U.S. government who has knowledge of drugs traveling to the United States to allow those drugs to get into the United States and to get to the street?

I believe it is, but you're back to your specific point--knowledge, actual knowledge. Not suspicion, not rumors, but knowledge. And that's the key issue: how do you acquire the knowledge? You acquire the knowledge, in some instances, it seems to me, by digging, by asking questions, by performing some investigative acts. And what we found was that that was done in a good many cases, but it wasn't done consistently across the board pursuant to a whole series of kind of steps...

...A memorandum of understanding is put together with the Justice Department [and CIA] and it in its original form [it] just happens to leave out narcotics on the list. And then there is a follow-up letter that says, "Oh, we forgot, but because the DEA and the CIA get along so well, we really don't have to worry about this." ...There seems to be this kind of laissez faire lack of guidance as to what to do or what not to do, so it's up to whoever is there in the field to make up the rules as they go. Is that what we're really talking about? It's kind of a vague situation so that you know you're going to run into drug traffickers because it's a major funnel to the U.S.

...We didn't find any evidence of an understanding that official Washington was going to look the other way with respect to allegations of drug trafficking... There was no record of the reason why Smith and Casey arrived at the understanding they did.

What we did find was a reaction to concerns about drug trafficking that relate to the sure knowledge that if these allegations were proven, it would destroy the whole purpose of the Contra endeavor. We saw plenty of awareness of that. But what we didn't see was that it translated into sort of practical guidance for officers in the field, and that's really the thrust of our report. That and the fact that there was no evidence developed that the institution or individual case officers were involved in drug trafficking. That's an important point, and I want to underscore that. There was no evidence at all, and neither the Department of Justice nor the House of Representatives, in their review, found any...

The general allegation or belief is that people whom the CIA supported, and I guess in the terms that you defined it before, assets or agents, that some of them did make money.

Well, there were clearly allegations of ... CIA [contacts] being involved with drugs. And what we found was that in many cases the CIA officers reported this fact and ceased contact, or either cleared up the allegation [or] found that it was true. But we also found that there were other cases where those steps weren't taken...

...Was there any substance to any of ... the pilots who claim that they flew [guns and drugs] for the CIA...and in some cases, landed at Homestead Air Force Base?

I don't think there was anything to that. But again, one would have to look into it. Each of those instances, each specific statement... You'd have to do an investigation, if you could, piecing together what went on...

I think what you have to say here is that in the context of this struggle between the Contras and the Sandinistas, there were accusations flying left and right, some of which were probably meritorious, and a good many of which were part of the battle they were involved in. The question for the CIA officer in the field was how do you deal with those accusations? And what they did was, for the most part, attempt to track them down. But on several cases, no action appears to have been taken. And that's the part that we find in our report.

And that's the troubling part?

It's troubling in the sense that the inconsistency in the response to the allegations seem to me to be hard to explain.

What were you trying to do in your report on the Contras and cocaine?

Our assignment was to, in the first instance, determine the truth or falsity of the Gary Webb piece, and that we called the California story...

But in addition, Director Deutsch asked us to look into the whole issue of drug allegations surrounding the Contra program, [a] much wider topic.

So we chose to divide the task into two. We did the California story, and that was relatively straightforward. We found no evidence of institutional involvement, of CIA. No case officer involvement in any of those allegations; and in effect, the Webb articles, the accusations...as far as we were concerned, we found no evidence of their veracity.

But the second question was a little bit more difficult, because that caused us to look at all the reported instances of drug involvement affecting the Contra operation. Now in terms of our methodology we looked at all the cable traffic between Washington, D.C. and the field stations. We looked at the records of the 1986 Senate committee investigation conducted by Senator Kerry and Jack Blum. We looked at the...Walsh investigation, insofar as that related to the drug business. But in that sense, that gave us the starting point for interviews of people who were in positions of authority at the time, and case officers in the field where we could identify them.

...We spoke to all of the [CIA] individuals who were still on active duty...because they are required under the IG statute to speak to us. We didn't talk to seven others who were retired CIA officers who could not be compelled, we did not have a subpoena to compel them to testify. But the House committee did in fact talk to them, and their report, the House committee's report, contains their testimony.

What did you conclude in the second part of this--on the role of drug trafficking in the contra operations?

We concluded that there was no institutional involvement by CIA, and there was no individual CIA case officer involvement in drug trafficking in the Contra operation during the period when we reviewed the records.

We did, however, find a number of instances where allegations of drug trafficking respecting the activities of those agents who supplied information or support services to CIA--and I want to underscore the fact that these were allegations of drug involvement--some of them were pursued to ground, and others were not looked into with any systematic vigor.

I want to get really specific here just in terms of having you tell me whether or not your investigation looked at this or didn't. To you knowledge, did the U.S. government, either the CIA in Washington, or law enforcement agencies, the DEA in particular, believe that some of these agents or assets were in fact involved in drug trafficking?

I can't speak for the other agencies. We had some collateral information from some DEA and other officials that were on the record. There were a number of instances that the CIA officers took the allegations to DEA in the field to see if they had any information on it. But our responsibility was to try to determine how CIA officials dealt with these allegations of drug use; and that's what they were--they were allegations...

Well, your own report shows that DEA on a number of occasions wanted to go to [Ilipongo] to check out a hangar, they were stopped.

Well, the point was, relationships in the field varied: some were good, some were bad.

But I think the way that our investigators ended up evaluating it was that it was sad that headquarters had not been more specific in indicating to officers serving in the field who were trying to keep the Contra movement alive what their precise obligations were in dealing with these allegations of drug use. Because it seemed to us that the street level noise in all of this situation were exchanges of these accusations. It's like just saying, "Joe Blow is a racist." It was out there, and the question was, how does one know, and what is the obligation of the officer to take the second step to try to run that rumor to ground or that accusation to ground.

But I can hear somebody saying out there, well, of course the CIA officer is not going to run the accusation to ground because he needs that person to do things against the Sandinistas. There may be a danger that that person winds up being a drug trafficker and embarrassing or destroying the whole program, but it's a risk he's going to have to take because that's what's going on, that's how people are making money.

... I think you quite rightly recognize in that formulation that knowing involvement with drug trafficking would have killed the program. There was enough concern about that in the Congress of the United States in the late '80s that they passed a law, attached a rider to an appropriation bill preventing monies going to people who were known traffickers in drugs.

The question is: what is knowledge? And I keep coming back to that. I know it seems like a legalistic answer, but in point of fact, what we found, and this is the key thing, what we found in the response of officers in the field is that some of these issues were checked out and some weren't.

And our question was, I guess our reaction at the end of the day was, why wasn't the same procedure applied to all? And in trying to answer that question, we noted that the directorate of operations' regulations on the matter were not in final form until after the whole episode--the guidance from--the knowledge at the working level that a law had been passed in 1987 forbidding monies to be used if drug trafficking was involved was also very spotty. And we fault the chain of command for that. That information should have been in the field.

The guy in the field really didn't know--

He didn't know how seriously to take this. What was his job? Was he supposed to quit the business of supplying blankets, arms, advice to the contra operatives, and just--and go on out and do an investigative effort to find out whether these allegations, these drug allegations, were well founded or not...

What about today? Is there an understanding in the field in the CIA today?

Well, the observations are today that case officers in the field are generally risk averse, that they don't want to take the chance of getting involved with local people who may have spotty backgrounds, and I think that's a bum rap...

If you have spotted an individual in the field whom you think can provide essential foreign intelligence information to the United States, you have obligations under current regulations [to] get as much biographical information on that person as you can, and to forward it back to headquarters for them to look at their databases to see what information they have. That the judgment to go forward with X, who may have a checkered past, is a joint decision between headquarters supervisors and the person in the field...

Well, it was clearly not a priority for the agency as an institution in terms of identifying, investigating and reporting narcotics violations.

No. At that particular time, that primary law enforcement responsibility fell to DEA in the field; but there was also an obligation on the part of the agency to provide information on that point when they encountered it.

So it wouldn't surprise you that DEA agents in the field felt that when they tried to investigate similar allegations themselves, they didn't get a lot of cooperation from CIA officers in the field?

I'd like to look at each of those cases, I really would, try to find out how much of that is the manner in which the request was put, who was involved. I mean these are awfully easy allegations to lodge...

It does seem to me that what was impressive [about allegations of Contra involvement in the drug trade] was that there was no way, in a [sense], for the agency's officers in the field to avoid contact, in some form or another, either through their assets or agents, or themselves, with people who might have been involved.

Who might have been involved, exactly. And the question is, what is the obligation to find out whether in fact they were involved.

And I would have thought in a situation like this guidance, given the nature of the rumors, the guidance could have been a heck of a lot better than it turned out to have been...Frankly, having studied the agency over a period of eight years, and the bureaucracy that is involved, it grieves me but doesn't surprise me that nobody grasped the nettle and got the right information to the field.

We saw too many instances where there was too much bureaucratic wheel turning. And I'm talking now principally about instructions of the directorate of operations. That after all is the command unit that is guiding the activity in the field, the collection activity and the support activity in the field. They ought to have a pretty full book on how you go about dealing with these issues...

So, what, are they stupid or just bureaucratically blind?

I would call them, if you had to characterize it, I would call them bureaucratically challenged; didn't get it done...

So it may be more convenient when you're looking at this from a distance out there to think of the CIA as a super efficient organization that must have conspired to do these things.

Correct.

[But] it really was just bureaucratic incompetence?

Yep. Bureaucratic inertia...It's on the record that it took the directorate of operations from the period of the earliest allegations to long after the Contra movement had moved on before these regulations came out.

And you just say that's bureaucratic inertia.

I'd say that's bureaucratic inertia.

There's no conspiracy?

No conspiracy. That's ineptitude. Yes, there are lots of things going on. There is congressional testimony. There are crises in other parts of the world. There are things that are keeping the individuals who write these regulations busy, but that's no excuse. You've got to get to it.