Source: https://fas.org/irp/offdocs/walsh/chap_20.htm
Timestamp: 2019-04-22 16:19:27+00:00

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The beginning and end of the case against Joseph F. Fernandez were unprecedented. The indictment of Fernandez represented the first time that a CIA chief of station had been charged with crimes committed in the course of his duties as a CIA officer. The dismissal of Fernandez derived from the first and only invocation by the attorney general of his power to prohibit the introduction of classified information at trial. As a result, Independent Counsel was deprived of the opportunity to demonstrate at trial the crucial role Fernandez played in the contra resupply operation run by Lt. Col. Oliver L. North and retired U.S. Air Force Major General Richard V. Secord, as well as the extent to which Fernandez tried to obstruct the inquiries of official investigative bodies attempting to learn the facts of the Iran/contra matter.
1 Indictment, U.S. v. Fernandez, No. 88-0236 (D.D.C. June 20, 1988).
The activities undertaken by Fernandez -- most at a time when the CIA was forbidden from ``participation in the planning or execution of military operations'' or ``participat[ion] in logistics activities integral to such operations'' -- included: (1) participation in the planning and construction of an airstrip in Costa Rica to serve the contra resupply operation; (2) mobilization of a contra fighting force on the southern front through inducements of lethal resupply; and (3) coordination of the southern front resupply effort. When questioned about these activities in early 1987 by investigators working separately for the Tower Commission and the CIA's inspector general, Fernandez made false statements regarding his relationship with North and Secord, the origin of the Costa Rican airstrip, and his involvement in and knowledge of the resupply operation.
The indictment alleged that the conspiracy took place within the District of Columbia and elsewhere, and that the obstruction and false statements occurred in the Eastern District of Virginia where Fernandez had been questioned. Independent Counsel properly presented the combined charges to a Grand Jury sitting in the District of Columbia, and following return of the indictment, Fernandez spent several months making various motions to dismiss it. It was only after litigating for three months that Fernandez moved to dismiss four of the counts on grounds of improper venue. In response, Independent Counsel moved to dismiss the entire indictment without prejudice, in order to avoid separate indictments in two separate districts for crimes that were entirely connected. Independent Counsel's motion was granted on October 19, 1988.
On April 24, 1989, as the North trial was ending, Fernandez was indicted by a Grand Jury sitting in the Eastern District of Virginia.2 In an effort to avoid the issues under the Classified Information Procedures Act that had plagued North, Independent Counsel did not seek the return of the conspiracy charge contained in the District of Columbia indictment. This was consistent with Independent Counsel's decision on January 13, 1989, to dismiss similar conspiracy charges in North.
2 Pre-trial and trial proceedings in Fernandez were supervised by Associate Counsel Laurence S. Shtasel, Geoffrey S. Stewart, and Geoffrey S. Berman.
3 Indictment, U.S. v. Fernandez, No. CR89-0150-A (E.D.Va. Apr. 24, 1988).
4. His contacts with Felix Rodriguez, a representative of North and Secord in El Salvador.
Independent Counsel concluded in November 1987 to go forward with a case against Fernandez in hopes of eventually using Fernandez as a witness. The demise of Boland conspiracy charges in North in January 1989 and Independent Counsel's subsequent decision not to seek conspiracy charges in the second indictment of Fernandez ended Independent Counsel's plans to prosecute other conspirators. Tambs later voluntarily testified in Independent Counsel's investigation. See History of Investigation chapter.
First, beginning in August 1985, Fernandez assisted North, Secord and others in building a refueling airstrip at Santa Elena in remote northwest Costa Rica that was designed to facilitate aerial resupply of the contras. Second, throughout the first nine months of 1986, Fernandez worked closely with Rafael Quintero, North and Secord's representative in Central America, both in building the airstrip and in coordinating the actual resupply flights that delivered weapons, ammunition and supplies to contra troops along the Southern Front.
Both of these efforts were designed to encourage the contras in northern Costa Rica to move back inside Nicaragua and resume fighting the Sandinistas. Fernandez urged contra leaders, directly and through CIA field personnel, to take up this struggle and induced them by promising lethal and non-lethal supplies. In the words of one CIA paramilitary officer, Fernandez authorized provision to the contras of everything from ``beans to bullets'' if they would re-infiltrate Nicaragua and provide a military counterpoint to the contras to the north.5 Having made these assurances, Fernandez worked closely with Quintero and North to follow through with their plans to construct an airstrip and resupply contra forces in the south.
5 [Classified Identity Withheld], Grand Jury, 6/5/87, pp. 21-25. See also [Classified Identity Withheld], OIC Deposition, 5/28/87, pp. 41-46, 49-51; [Classified Identity Withheld], Grand Jury, 4/13/88, pp. 14-18.
6 Fernandez, Tower Commission Testimony, 1/28/87, pp. 9, 12-14; SAN JOSE Cable, 8/8/85, DO 181545-41; SAN JOSE Cable, 8/13/85, DO 189740-38; SAN JOSE Cable, 8/14/85, DO 101720-19.
7 [Classified Identity Withheld], OIC Deposition, 5/28/87, pp. 25-26, 52-54; [Classified Identity Withheld], FBI 302, 10/13/87, p. 3.
8 Fernandez, Tower Commission Testimony, 1/28/87, pp. 14-15; Owen, Grand Jury, 11/13/87, pp. 52-58; Owen, North Trial Testimony, 2/27/89, pp. 2446-47 and 3/1/89, pp. 2705-07; Memorandum from TC [Owen] to BG [North], 8/25/85; [Classified Identity Withheld], OIC Deposition, 5/28/87, pp. 23-24, 29.
9 Fernandez, Tower Commission Testimony, 1/28/87, pp. 16-17; Quintero, FBI 302, 11/13/87, p. 10; [Classified Identity Withheld], OIC Deposition, 5/28/87, pp. 24-25; Haskell, FBI 302, 7/6-7/87, pp. 4-6.
10 Fernandez, Tower Commission Testimony, 1/28/87, pp. 16-17; Quintero, FBI 302, 11/13/87, p. 10; Quintero, FBI 302, 11/23/87, p. 4; Quintero, North Trial Testimony, 3/2/89, pp. 2916-17.
13 Quintero, Grand Jury, 1/6/88, p. 96. See also KL-43 Message from Secord to North, 6/6/86, ALU 003835 (asking North to ``light a fire'' under Fernandez to get increased guard protection for the airstrip).
14 Quintero, FBI 302, 11/13/87, pp. 12-13; Quintero, FBI 302, 11/23/87, pp. 15-16; Fernandez, Tower Commission Testimony, 1/28/87, pp. 25-26.
15 Taylor, FBI 302, 1/30/89, p. 5. See also KL-43 Message from Secord to Dutton, 7/29/86, 0360-61 (proposing that Dutton negotiate with Fernandez ``re future use'' for airstrip); Galvin, FBI 302, 6/13/87, pp. 3-4 (Southern Command unaware of purpose for airstrip).
16 Fernandez, Tower Commission Testimony, 1/28/87, pp. 52-56; Quintero, FBI 302, 11/13/87, p. 14; Quintero, FBI 302, 11/23/87, pp. 5-6; KL-43 Message from Fernandez to North, 3/3/86, AKW 004421; KL-43 Message from Secord to North, 4/9/86, AKW 004416; KL-43 Message from Fernandez to North, 4/12/86, AKW 004410; KL-43 Message from North to Fernandez, 4/15/86, AKW 004409. See also messages cited in n.16 below.
17 Fernandez, Tower Commission Testimony, 1/28/87, pp. 33-34; Quintero, FBI 302, 11/13/87, pp. 13-14. See also these KL-43 messages, all of which involve Fernandez or which report on conversations with Fernandez: Secord to North, 3/24/86, AKW 004419 & 004424; Secord to North, 4/9/86, ALU 003840; Secord to North, 4/16/86, AKW 004408; Secord to North, 4/23/86, AKW 004403; Quintero to Secord, 4/23/86; Secord to North, 5/2/86, AKW 004401; Secord to North, 5/12/86, ALU 003834; Secord to North, 6/2/86, AKW 004393; Secord to North, 7/11/86, 00371; Quintero to Secord, 7/16/86, 00367; Steele to Earl, 8/18/86, 00342; Fernandez to Quintero, 9/2/86, 00308-09; Dutton to Quintero, 9/9/86, 00413; Quintero to Dutton, 9/10/86, 00410; Fernandez to Quintero, 9/10/86, 00414; Dutton to North, 9/17/86, 00423; Fernandez to Quintero, 9/17/86.
18 [Classified Identity Withheld], Grand Jury, 1/20/88, pp. 27-28, 40-41.
20 See, for example, SAN JOSE Cable, 12/7/86, DO 166532; Inspector General Notes, 1/11/87, ER 8820; ``Ex-CIA Agent is Bitter Over Iran Affair,'' The New York Times, 11/27/89, p. A31.
21 [Classified Identity Withheld], Grand Jury, 4/13/88, pp. 8-19.
22 KL-43 Message from Fernandez to North, 4/12/86, AKW 004410.
23 KL-43 Message from North to Fernandez, 6/16/86, AKW 004389.
As a result of Fernandez's efforts, resupply operations had improved greatly by September 1986. During that month alone, six successful lethal air drops were made along the southern front.24 The resupply operation came to an abrupt halt in early October 1986, however, when a private benefactor plane carrying, among others, Eugene Hasenfus, was shot down over Nicaragua.
24 SAN JOSE Cable, 9/10/86, DO 72985; SAN JOSE Cable, 9/15/86, DO 73134; SAN JOSE Cable, 9/30/86, DO 77565.
25 Groening, FBI 302, 1/6/89, pp. 1-3.
Some months after Fernandez arranged to have his telephone records removed from their proper place of storage, Independent Counsel requested these records from the Embassy. They could not be located. The Costa Rican telephone company provided the records to Independent Counsel in August 1988. At trial, these records would have demonstrated that there was frequent contact between Fernandez and North, and Fernandez and Quintero -- particularly at the times of attempted resupply flights.
The downing of the Hasenfus airplane and the exposure of secret sales of arms to Iran sparked two official investigations, both of which sought in part to examine the role of the CIA in these operations. One investigation was made by the CIA's inspector general; the other was by the President's Special Review Board, the Tower Commission.
26 Fernandez was interviewed by Tower Commission staff on January 21, 1987. Fernandez testified to the Commission on January 28, 1987. Fernandez was interviewed by the CIA's Office of Inspector General on January 11, January 24, and February 2, 1987.
27 Inspector General Notes, 1/11/87, ER 8820-25; Inspector General Notes, 1/24/86, ER 8826-36; Inspector General Notes, 2/2/86, ER 8792-98; Black, Grand Jury, 5/13/88, pp. 9-11, 13-24; Fernandez, Tower Interview, 1/21/87, ALU 3818-20.
28 Fernandez, Tower Commission Testimony, 1/28/87, p. 5.
29 Ibid., pp. 3-4. See also Fernandez, Tower Interview, 1/21/87, ALU 3821-26; Bruh, FBI 302, 10/2/87, p. 2 (Fernandez admitted, ``You have me and my career is ruined!'').
General Scowcroft: That stunned you in what way? That they existed?
30 Fernandez, Tower Commission Testimony, 1/28/87, p. 4.
In both the District of Columbia and Virginia proceedings, Fernandez made a number of motions to dismiss the indictments. All of the motions that Fernandez directed at the legal sufficiency of the charges that were adjudicated were denied.
As in North, the most significant legal issues raised by Fernandez concerned immunity granted him by Congress in return for his testimony and the protective requirements of Kastigar v. United States, 406 U.S. 441, 458 (1972), and his demands for classified information. While the court had little difficulty disposing of Fernandez's Kastigar challenge, Fernandez's CIPA claims ultimately resulted in dismissal of the case.
31 Ibid., pp. 22-23; Memorandum Opinion and Order, Fernandez, slip. op. at 4-5 (E.D. Va. June 15, 1989).
Fernandez filed notices under the Classified Information Procedures Act (CIPA) on May 24, June 23, July 3, and July 7, 1989, that identified the classified information he proposed to disclose at trial. The district court conducted hearings on the notices on July 10, 13, and 14, 1989. On the first day of hearings, over the Government's objection, the district court ruled orally and without written opinion that two broad categories of classified information were material to Fernandez's defense: the operational details of three highly sensitive projects in Costa Rica, none of which was described or implicated by the indictment or was in any way a part of the Government's case-in-chief; and the identity of three CIA stations or facilities in Central America.
33 Defendant's Second Notice Pursuant to Section 5 of CIPA, Fernandez (E.D. Va. July 3, 1989).
34 Transcript, Closed CIPA Hearing, Fernandez, 7/10/89, pp. 48-50.
36 Affidavit of Assistant Attorney General Edward S.G. Dennis, Jr., Fernandez (E.D. Va. July 12, 1989); Declaration of Deputy Director for Operations of the Central Intelligence Agency, Fernandez (E.D. Va. July 12, 1989); Declaration of [Classified Identity of Agency Director Withheld], Fernandez (E.D. Va. July 12, 1989).
37 Transcript, Closed CIPA Hearing, Fernandez, 7/13/89 p. 74.
were all fully discussed in cables and in face to face meetings between . . . Fernandez and CIA Headquarters. Once it was determined that . . . Fernandez, as well as other CIA personnel, would participate in these projects, there was ongoing communication between the Costa Rica Station and Headquarters regarding the implementation, functioning and success of these projects. During the period 1984 through 1986, over forty cables -- providing background, operational details, mutual concerns and the results of these important projects -- were exchanged between Fernandez and senior CIA officers at Langley, Virginia.
During the period late-1984 through 1986, CIA Headquarters at all times was informed of, and approved, Fernandez's role in these projects. Fernandez's immediate superior was consulted extensively about his work, and senior officers were also familiar with Fernandez's work on these projects.
39 Transcript, Closed CIPA Hearings, Fernandez, 7/14/89, pp. 5-6.
41 Ibid., pp. 9-10, 14.
While we did discuss at the previous hearing, reference was made as an example concerning the statement about the airstrip, it really goes broader than that in terms of some allegations as to other meetings and the fact that there may have been or at least the defendant alleges that these programs were overlapping or intertwined.
42 Trial Transcript, Fernandez, 7/24/89, p. 8.
2. In 1984 through 1986, the CIA had stations and facilities in various countries in Latin America.
3. Throughout the period from 1984 to 1986, the CIA had officers and employees working in the countries of [Classified Country Names Withheld].43 Certain of these officers and employees worked on matters involving the contras. CIA officers and employees also collected intelligence concerning (a) the activities of the Sandinista regime in Nicaragua, (b) Nicaraguan military activities, (c) the activities of the political leadership of the contras, (d) the contras' military activities, (e) the contras' logistical requirements, (f) the contras' receipt of arms, food, clothing and other materiel, and (g) certain activities of private benefactors who were supplying the contras with lethal and non-lethal aid.
43 While the names of these countries have been withheld here, the Government would have admitted them at trial had the trial court approved the Government's July 12, 1989, submission.
44 See note 43 above.
45 See note 43 above.
46 See note 43 above.
47 See note 43 above.
48 Transcript, Closed CIPA Hearing, Fernandez, 7/13/89, p. 65.
50 Trial Transcript, Fernandez, 7/24/89, p. 5.
53 U.S. v. Fernandez, 887 F.2d 465 (4th Cir. 1989).
54 Although the existence of the disputed facilities had from time to time been publicly reported, the intelligence agencies and the Attorney General concluded that it would be detrimental to national security if the U.S. Government acknowledged their presence through Government documents or Government witnesses. Independent Counsel attempted to persuade the Attorney General to release the information because of its prior exposure. Independent Counsel was unsuccessful. The Attorney General's decision in Fernandez to preclude, pursuant to CIPA 6(e), the introduction of classified information at trial was not subject to judicial review.
55 Hearing on Motions, Fernandez Transcript, 11/24/89, p. 10.
57 U.S. v. Fernandez, Top Secret Opinion, p. 29 (4th Cir. 1990).
59 Fernandez Notice of Lodging (E.D. Va. Oct. 12, 1990) (filing Letter from James S. Reynolds to Hon. Claude M. Hilton, 10/12/90).
Independent Counsel did not challenge the need to protect the three CIA programs. He was willing to drop the charges to which the programs had been held to pertain. The critical information that would have permitted trial of the other charges was the location of two well-known CIA stations. Each had been identified in North. They were regularly mentioned in the press -- even in the obituary of a former station chief. The intelligence agencies' submissions to the Attorney General were not specific enough to rebut this fact. They were general reiterations of the need to preserve ``deniability'' of well-known facts.
60 Letter from W. Lee Rawls to Anthony C. Beilenson, 10/24/90, p. 5.
In Fernandez or any other case prosecuted by an Independent Counsel, it is not up to the Attorney General to assess its merits or its investigative purpose. In fact, although Fernandez's testimony to Congress was immunized and could not have been used against him, the Attorney General must have known that Fernandez admitted to the Select Committees that he had lied to both the Tower Commission and the CIA's Inspector General. Further, in a newspaper interview following Judge Hilton's dismissal of the case, Fernandez stated that he would have incriminated higher-ups in the CIA and other Administration officials had the case gone to trial.61 It should have been Independent Counsel's decision -- not the Attorney General's -- whether this evidentiary information should have been developed at trial or by some other means.
61 ``Ex-Agent is Bitter Over Iran Affair,'' The New York Times, 11/27/89, p. A31.

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