EX-CONTRAS LEADER CALLS CLAIMS OF CIA DRUG SCHEME `RIDICULOUS'.

Byline: Thomas Farragher Knight-Ridder Tribune News Wire

Former Nicaraguan resistance leaders, in a stormy session before a Senate panel Tuesday, denied and ridiculed suggestions that the CIA took part in a scheme to sell crack cocaine to Los Angeles street gangs and ship millions in profits to a CIA-run guerrilla army in Nicaragua.

Adolfo Calero, the former commander of the Contras in their fight against Nicaragua's government in the 1980s, called the allegations ``unfounded, ridiculous - well, preposterous.''

``I would say that all of this story - rather than about crack, is about crap,'' Calero testified before the Senate Intelligence Committee.

Eden Pastora, the chief resistance leader on Nicaragua's Southern Front, said he was unaware of any link connecting the CIA, drug profits and the Nicaraguan rebels.

``I have no knowledge of anything of the sort,'' Pastora, speaking through an interpreter, told the committee.

The Senate inquiry stems from a San Jose Mercury News series that traced the nation's crack cocaine explosion to two Nicaraguan cocaine dealers, Danilo Blandon and Norwin Meneses. The two men were civilian leaders of an anti-communist commando group formed and run by the CIA during the 1980s. The newspaper never reported a direct CIA link, but many readers drew that conclusion.

Blandon, who is now an undercover informant for the Drug Enforcement Administration, has admitted in federal court that his biggest customer was a South Central Los Angeles crack dealer named ``Freeway'' Rick Ross, who turned Blandon's cocaine into crack and distributed it to the Crips and Bloods street gangs.

The series has touched off a firestorm of interest nationwide, particularly among African-American activists who say the reports demonstrate the U.S. government's hostility to African-American communities, and sparked several federal inquiries.

It also has been assailed by three of the nation's biggest newspapers, which have said that the Mercury News overstated the size and importance of the drug ring and gave a misleading impression that the CIA was involved in drug trafficking.

Sen. Arlen Specter, R-Pa., and chairman of the Senate Intelligence Committee, said his panel on Monday took testimony from Blandon in secret - at Blandon's insistence.

Specter said Blandon traced his association with Meneses back to 1981, when Blandon began drug dealing to aid the Contras' cause. According to Specter, Blandon said he terminated the partnership in late 1982 or 1983, when he went into business for himself and stopped sending profits to the Contras. Blandon told the committee that he channeled a total of $60,000 to $65,000 to the Contras.