30,000 Demand Investigation of S&L Collapses, Contra Link

by Christic Institute

30,000 DEMAND INVESTIGATION OF S&L COLLAPSES, CONTRA LINK

Christic Institute, Thursday, November 15, 1990

LOS ANGELES--The Christic Institute today delivered to Congressman Tony Beilenson (D-Calif.) petitions from 30,000 citizens demanding a public Congressional investigation of evidence that CIA-sponsored covert operatives may have looted dozens of savings and loan institutions, funneling those monies into the illegal contra resupply operation during the time aid to the contras was outlawed by Congress.

Beilenson is chair of the powerful House Permanent Select Committee on Intelligence, which oversees the operations of the Central Intelligence Agency and other covert agencies.

``The Christic Institute has uncovered evidence that covert operatives and drug traffickers exploited dozens of S&Ls to launder funds destined for the illegal contra war,'' said Daniel P. Sheehan, the Institute's general counsel. ``This evidence suggests that the links among S&Ls, covert operatives and organized crime can be traced to the `off-the-shelf enterprise' described by Oliver North before the Iran-contra investigating committees.

``It appears that S&Ls may have made fraudulent loans in order to siphon money to the contras at a time when Congress had cut off aid to the rebels.''

The Christic Institute also cited a series by Houston Post reporter Pete Brewton which said that ``at least 27 failed financial institutions (25 S&Ls and two banks) had links to CIA operatives or to organized crime figures with links to the CIA.''

``The savings and loan collapse will cost taxpayers over $500 billion,'' said Sara Nelson, the Institute's executive director. ``If it is true that S&L money went to the contras, then the U.S. public was duped into paying the bill for the contra war after Congress had outlawed contra aid. The evidence pointing to a systematic fraud on the American people demands a thorough investigation.''

Separate investigations have been conducted by the Institute, the Houston Post and Congressman Frank Annunzio, chair of the House Banking subcommittee on financial institutions. Each investigation has raised serious questions about the relationships among failed S&Ls, the illegal contra resupply operation and CIA operatives.

Christic Institute activists joined professional canvassers from the Citizen/Labor Energy Coalition to gather the signatures. In one day of canvassing in 22 cities, more than 30,000 people signed the Christic Institute's petition demanding an investigation of the links between covert operations and the S&L collapse.

``The response to this petition has been enormous,'' said Nelson, ``and shows just how upset people are that Congress has failed to investigate the intelligence connection to the S&L collapse. We hope that Congressman Beilenson will take this message very seriously.''

In late 1988, during its ongoing investigation of the _Avirgan v. Hull_ lawsuit, the Christic Institute uncovered evidence that CIA-sponsored drug traffickers may have used dozens of thrifts in several states to launder cocaine profits destined for the illegal contra war in Nicaragua.

_Avirgan v. Hull_ was filed in May 1986 on behalf of journalists Tony Avirgan and Martha Honey. Avirgan was one of more than 20 reporters injured in May 1984 when a terrorist bomb was detonated during a press conference in La Penca, Nicaragua. Eight people were killed in the explosion, including an American reporter for the Religious News Service.

Following investigations by Avirgan and Honey and by the Christic Institute, a suit was filed charging that the bombing was planned and carried out by a racketeering enterprise involved in drug trafficking, gun smuggling, money laundering and assassination.

The suit is on appeal before the 11th Circuit Court in Atlanta. Oral arguments in the appeal are expected to be heard in the coming weeks.