NO CRACK-CONTRA LINK FOUND : SHERIFF'S PROBE FAILS TO UNEARTH SUPPORT CONCERNING CLAIMS OF CONNECTION.

Byline: David Bloom Daily News Staff Writer

Sheriff Sherman Block says a two-month inquiry shows no evidence of CIA involvement in the distribution of cocaine in South Central Los Angeles, declaring that as far as his department is concerned, ``this case is closed.''

Block's investigators reviewed a 1986 interagency drug sweep of 14 Southern California houses that included that of Oscar Danilo Blandon Reyes, a Nicaraguan at the heart of a recent controversy over possible Central Intelligence Agency connections to crack cocaine dealing in South Central Los Angeles in the 1980s.

``My primary objective was to see if we were involved in any inappropriate conduct with another government agency,'' Block said. ``Whether the CIA ever was involved in any drug activity anywhere else, I couldn't tell you that. I can only talk about this particular investigation.''

An August series by the San Jose Mercury News raised questions about whether Nicaraguans associated with the Contra guerrillas and their CIA allies were using crack cocaine sales to finance a war against the Sandinista-led Nicaraguan government. The agency's own internal review turned up no evidence either.

The newspaper series also raised questions about the 1986 investigation, because it quoted a sheriff's sergeant's sworn affidavit justifying the raid and saying that Blandon was running drug money through Miami banks and into Contra coffers for their guerrilla war.

Block said the sergeant, later fired after a tax evasion conviction, admitted to ``embellishing'' the affidavit to improve the chances of getting a judge to approve a search warrant for the sweep.

The Mercury News series stirred extraordinary controversy, prompting an unprecedented town hall meeting in Watts by CIA Director John Deutch and close attention by leaders and residents in the city's African-American community.

The sheriff's team wrote a 3,600-page report on its investigation, saying it had found no link between the CIA and cocaine sales by Blandon to South Central drug kingpin ``Freeway Ricky'' Ross.

Ross, recently given a life sentence in federal prison for his latest drug conviction, charged that Blandon, with CIA assistance, provided him the cocaine he needed to dominate drug sales in South Central in the 1980s.

But Block said he found no cover-up by his own officers and no connection between the CIA and South Central's epidemic of crack use. Block dismissed Ross' statements as an attempt to avoid a stiff prison sentence.

``They were trying to keep from going to prison and they threw up this smoke screen,'' Block said. Ross' attorneys ``got caught up in that and it's been elaborated on ever since.''

Block said Blandon did give two pickup trucks and $6,000 to one Contra faction, the ARDE led by Eden Pastora, but not to the FDN faction headed by Enrique Bermudez and associated with the CIA.

``The amount of money that appears to have gone to support the ARDE was minimal,'' Block said. ``(Blandon) was in the drug business for personal gain. In fact there were reports that he was so cheap, if he had to shoot someone he would go out and shop for the cheapest bullets.''

Blandon also had had a relationship with Norwin Meneses, another Nicaraguan who was more directly connected with the CIA, but that relationship cooled by 1981 or 1982, long before he began running cocaine into South Central Los Angeles, Block said.

``Though a sympathizer of the Contras, Blandon was not an active member,'' Block said.

Block's investigators did find that three deputies involved in the 1986 sweep stole a total of $53,000 they found at the homes of Blandon and another drug dealer, Ronald Lister.

The three, whom Block would not name, were among 24 deputies and three civilians who later were convicted of stealing money from suspects during unrelated drug searches and fired.

Blandon and Lister had mentioned the thefts when contacted by investigators, Block said, and all three deputies admitted to the stealing knowing that they could not be prosecuted because the statute of limitations has expired. Block said they had cooperated in the investigation in exchange for anonymity.

The sweep turned up no evidence of drug dealing but investigators determined that members of the Blandon organization had spotted officers watching them at least twice in the weeks before the raid.

That had led members of the organization to hide drugs and related assets and was the reason the sweep turned up virtually nothing, Block said.

Block said the four-volume investigation report had been given to the U.S. House and Senate intelligence committees for their review.

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Photo: Sherman Block

Discusses probe