Was Former DEA Agent Jailed for Exposing ATF Arms Trafficking?

Iran/Contra-Era Whistleblower Cele Castillo Alleged in 2008 That Federal Agents Were Helping to Smuggle Guns into Mexico

Cele Castillo, a former DEA agent who blew the whistle on the CIA-backed arms-for-drugs trade used to prop up the 1980s Contra counter-insurgency in Nicaragua, is now sitting in a federal prison for what may well be another act of whistleblowing in this century.

Before Castillo reported to the federal pen in July 2009, where he is now stuck until April 2012, according to Federal Bureau of Prisons records, he shared with this reporter a series of revelations concerning arms trafficking and what he thought were corrupt ATF agents.

Those revelations, now some three years old, dovetail in great detail with the still unfolding ATF Fast and Furious operation, in which federal ATF agents allowed thousands of high-powered weapons purchased by criminal operatives at U.S. gun stores to be smuggled into Mexico unimpeded.

And Fast and Furious, as recent news reports have revealed, was not the first such operation put in play by U.S. federal law enforcement agencies. A similar “gun-walking” tactic was employed by ATF in 2006 and 2007 under the Bush administration through a program known as Operation Wide Receiver.

Castillo’s case, which involved allegations that he purchased and sold firearms illegally, was largely ignored by the mainstream media, though Narco News reported extensively on it and Castillo’s contention that he had been framed and was the victim of prosecutorial misconduct. [Past coverage at this link.]

At the time, as he was going through the buzz-saw line that is the federal judicial system, Castillo told Narco News that he was likely being targeted because of his role in exposing the CIA-backed effort to overthrow the Sandinista government in Nicaragua some 25 years earlier, or possibly because he had evidence of corruption within the ATF. But in truth, Castillo really didn’t know what direction the assault was coming from or why he was being targeted.

Now, though, in light of the exposure of ATF’s Fast and Furious, it seems the question needs to be asked:

Did Castillo, well before Fast and Furious came to light this year, rip back the curtain on a long-running U.S.-government sanctioned program to supply illegal arms to paramilitary units supported by the Mexican military — units charged with clandestinely carrying out the dirty work of the drug war in Mexico?

The answer to the question should matter to all of us, because that “war” has cost the lives of more than 50,000 Mexican citizens since it was launched in late 2006 under the reign of Mexican President Felipe Calderon.

Well, here’s what Castillo told Narco News in late 2008, some three years before news of Fast and Furious and Operation Wide Receiver starting making headlines in the mainstream news:

During the [Mexican] presidential elections, El Chapo [Joaquin Guzman Loera, the leader of the Sinaloa drug organization] supported [Mexican president] Calderon. Calderon then rented the military to El Chapo to take out Osiel [Cardenas Guillen, head of the rival Gulf Cartel]. Keep in the back of your mind: why has Chapo never been arrested? Calderon took back the military and is now working hand-in-hand with El Chapo.

… The majority of the guns that are going into Mexico from the gun shows are going to the The Mexican paramilitary unit out of Monterrey, Mexico. … A Mexican military captain, "El Capi," is doing all the purchases. 

…. These people are part of President Calderon's people who control the drug trade into the U.S. There is an ATF agent … who works with these people.

Castillo, at the time, assumed the ATF agent, actually two of them that he identified, were on the take, not part of an officially sanctioned U.S. operation. But events that have unfolded since 2008 open that assumption up to a possible different interpretation.

Castillo, who never lost his investigative edge, said in 2008 that some of his information was coming from a U.S. government informant, who was later murdered. In addition, he claimed a notorious prison gang, the Texas Syndicate, was working with the supposedly corrupt ATF agents to assure the gun-trafficking into Mexico remained protected from law enforcement intervention.

Castillo’s claims sound strangely similar to allegations that have surfaced recently in the case of Jesus Vicente Zambada Niebla, a high-level leader of the Sinaloa Cartel now standing trial in federal court in Chicago on narco-trafficking charges. Zambada Niebla claims the leadership of the Sinaloa Cartel has a quid pro quo arrangement with the U.S. government through which they were granted immunity from prosecution in exchange for providing information on rival drug cartels. Zambada Niebla, in court pleadings, also alleges the Fast and Furious operation was part of an effort to supply Sinaloa Cartel enforcers with weapons.

From Zambada Niebla’s pleadings:

The United States government considered the arrangements with the Sinaloa Cartel an acceptable price to pay, because the principal objective was the destruction and dismantling of rival cartels by using the assistance of the Sinaloa Cartel — without regard for the fact that tons of illicit drugs continued to be smuggled into Chicago and other parts of the United States and consumption continued virtually unabated.

Essentially, the theory of the United States government in waging its “war on drugs” has been and continues to be that the “end justifies the means” and that it is more important to receive information about rival drug cartels’ activities from the Sinaloa Cartel in return for being allowed to continue their criminal activities, including and not limited to their smuggling of tons of illegal narcotics into the United States. This is confirmed by recent disclosures by the Congressional Committee’s investigation of the latest Department of Justice, DEA, FBI, and ATF’s “war on drugs” operation known as “Fast & Furious.”

As a result of Operation Fast and Furious, the pleadings assert, about “three thousand people” in Mexico were killed, “including law enforcement officers in the state of Sinaloa, Mexico, headquarters of the Sinaloa Cartel.”

Among those receiving weapons through the ATF operation, the pleadings continue, were DEA and FBI informants working for drug organizations, including the leadership of those groups.

“The evidence seems to indicate that the Justice Department not only allowed criminals to smuggle weapons, but that tax payers’ dollars in the form of informant payments, may have financed those engaging in such activities,” Zambada Niebla's pleadings allege. “…It is clear that some of the weapons were deliberately allowed by the FBI and other government representatives [including the ATF] to end up in the hands of the Sinaloa Cartel and that among the people killed by those weapons were law enforcement officers.

“… Mr. Zambada Niebla believes that the documentation that he requests [from the US government] will confirm that the weapons received by Sinaloa Cartel members and its leaders in Operation ‘Fast & Furious’ were provided under the agreement entered into between the United States government and [Chapo Guzman confidante] Mr. Loya Castro on behalf of the Sinaloa Cartel that is the subject of his [Zambada Niebla’s] defense….”

The frame-up

Despite being represented by an attorney who was suspended by the State Bar of Texas for misapplying clients’ funds shortly after Castillo inked a dubious plea deal with the federal prosecutor, the judge in Castillo’s case, at the urging of the that same prosecutor, determined that there was no evidence of Castillo’s defense being tainted by the stink of ineffective assistance of counsel.

The fact that the same attorney’s son was facing federal gun charges, similar to those brought against Castillo, also was deemed by the judge to be little more than an “inference” of a conflict of interest on the part Castillo’s attorney. Hence, the judge, at a hearing held on Friday, July 10, 2009, in federal court in San Antonio, Texas, ruled that Castillo was not likely to succeed in the appeal of his conviction then pending before the Fifth Circuit U.S. Court of Appeals — and he did not succeed.

As a result, the judge — after extending in mid-February 2009 Castillo’s report-to-prison date by some four months due to the very same ethical concerns raised about his attorney — did an about face at the July 10, 2009, hearing and ordered that Castillo report to prison on July 30, 2009 — to begin serving a 37-month sentence for violating federal firearm regulations, a sentence enhanced due to the judge’s apparent belief that Castillo sold weapons in Mexico.

Castillo, as well as other law enforcers who spoke with Narco News, at the time, contended that the federal prosecutor in the case turned Castillo’s paperwork violation (selling legally purchased weapons without a firearms-dealer permit) into a federal arms-trafficking case as payback for his whistleblowing activity.

The key to the severity of the prison sentence meted out to Castillo — who besides being a former DEA agent also is decorated Vietnam veteran with no prior criminal record — is that the prosecutor in his case argued, and the judge seemed convinced, that Castillo was likely trafficking weapons into Mexico — and by implication to members of narco-trafficking cells.

But Narco News obtained documents (letters that were filed with the Department of Justice) that allege the judge in Castillo’s case was mislead about the trafficking charges by the prosecutor in the case.

Those documents also show that after the federal judge, W. Royal Furgeson Jr., was made aware of that allegation, he chose to chastise Castillo for bringing those charges to his attention outside the proper channels. Subsequently, Furgeson then revoked Castillo’s bail at the July 10, 2009, hearing and ordered him to report to prison to serve out an extreme sentence based on the allegedly misleading — possibly perjured — statements advanced by the federal prosecutor,

Castillo lays all of this out in a letter sent to Judge Furgeson (dated May 1, 2009, and obtained by Narco News). That same letter, including evidence to back up the allegations, Castillo says, also was delivered to the Department of Justice’s Office of Inspector General and to the DOJ’s Civil Rights Division. In addition, Castillo says he wrote a letter to Attorney General Eric Holder making him aware of the allegations of prosecutorial misconduct in his case as well.

From Castillo’s letter to the judge:

[The prosecutor] made a federal case that I had not documented any names of the people [to whom] I had sold guns. I was given 4 point [sentencing enhancement] for trafficking because [the prosecutor] had once again lied.

… My attorney once again assured me that there was no reason why Your Honor [Furgeson] would not place me on probation, because I had no previous criminal record plus my health issues [a chronic heart condition and Post Traumatic Stress Disorder] would be brought under consideration. He stated that in the worst scenario, I would get one year, (home confinement)....

… [The prosecutor] also knew exactly whom the guns went to because the [federal] agents had followed me when I delivered the shotguns. Two agents, from two different agencies [ATF and ICE] have written reports [REPORT OF INVESTIGATION] to that effect with the full name and telephone numbers of the individual who took custody of the guns. Now may there be no mistake that the individual who took custody of the guns did in no way shape or form break the law by taking custody of the guns. He was not a prohibited person and the government knew this to be a fact.

… I know that if Your Honor had heard the truth, I would have probably fallen into the probation level of the federal guidelines. Now I can prove that [the prosecutor] lied to Your Honor, with [my attorney’s] handwritten notes and the two [federal] agents’ reports.

Caging the Whistleblower

What Castillo could not have known at the time of his arrest and prosecution is that ATF, through Operation Wide Receiver and later Fast and Furious, was engaged in a legally-sanctioned program allowing thousands of weapons — purchased at guns stores in the U.S., where Castillo also purchased his hobby firearms — to be smuggled, or “walked” into Mexico and into the hands of drug-war mercenaries and assassins.

Is it possible that Castillo had unknowingly penetrated a version of these ATF operations without realizing it, thinking he had stumbled onto some corrupt agents in league with the drug cartels? Could it be that Castillo is now sitting in federal prison, a framed man, because he knew too much and had been deemed a dangerous person who was too close to exposing a clandestine arms-trafficking operation designed to prop up a U.S.-backed drug cartel?

These are questions that can’t be answer absent a full investigation into Castillo’s plight. But who is going to undertake such an investigation, the Department of Justice, which put him behind bars in the first place?

Castillo’s fate after exposing the CIA-supported Iran/Contra era arms-for-drugs smuggling operation in Central America certainly was not embraced by powerful forces within the standing U.S. bureaucracy.

Castillo, while a DEA agent in Central America in the 1980s, during the Reagan/Bush administration, uncovered evidence that the CIA and the White House National Security Council, through San Antonio, Texas, native and national counter-terrorism coordinator Lt. Col. Oliver North and other CIA assets, were carrying out illegal operations at two hangers at Ilopango Airport in El Salvador. Those airport hangars, Castillo contends, served as weapons and narcotics transshipment centers for funding and arming the U.S.-backed Contra counter-insurgency against the government of Nicaragua.

From that moment forward, Castillo became a target of those pulling the strings in that dirty war.

“Cele became a household word inside DEA,” Sandalio Gonzalez, a retired DEA commander, told Narco News in a prior interview. “They ruined his reputation over the stuff that happened in El Salvador [Iran/Contra] and he became a target. He took on the Establishment, and it didn’t come out so good for him.”

Castillo’s investigation into the Ilopango operation was eventually torpedoed via CIA interference and he was subjected to a steady stream of retaliatory DEA internal investigations.

Castillo subsequently, after a 12-year career, retired from the DEA, but until the day he reported to prison in late July 2009, he remained an outspoken critic of the hypocrisy of the war on drugs, penning a book about his experiences in DEA, called Powderburns, and appearing on numerous radio and TV shows — including a Showtime series called American Drug War.

Castillo also told Narco News in a prior interview that, as part of his part-time work as a consultant on criminal cases, he had uncovered, prior to his arrest in March 2008 on firearms charges, evidence that two ATF agents “were on the payroll of a Mexican cartel.”

“One informant, who actually paid one of these ATF agents in Monterrey, Mexico, told me about their involvement,” Castillo asserts. “That informant later got whacked. They [the ATF brass] know who these corrupt agents are, but they don’t want to deal with the embarrassment of cleaning the whole mess up.”

Well, more than two years after Castillo reported to jail, it appears that it could be more than embarrassment that prevented ATF from launching an investigation into its own; it may well be the agency itself, and its leadership well into the high ranks of the Justice Department that oversees ATF — via Operation Wide Receiver and Fast and Furious — were, in fact, complicit in the arms trafficking.

It’s at least a scenario that should be considered by someone in power who is not corrupt, or bought-and-paid for, or seeking to simply score partisan political points. Is there yet one honest man or woman in our government who cares about justice, who will lend a hand to a man who does?

This reporter visited Castillo in prison last year and had been in regular contact with him via the prison’s email system up until earlier this year, when Castillo was informed that his mother, whom he was very close to, had died. He was not allowed to attend the funeral.

Then, in late October of this year, officials with La Tuna federal prison in Anthony, Texas, sent out the following email:

Inmate 11807280 - CASTILLO, CELERINO III no longer has access to the Trust Fund Limited Inmate Computer System; therefore, he/she may not send or receive messages.

“This is the kind of stuff [Castillo’s case] that happens in nations ruled by dictatorships,” former DEA commander Gonzalez told Narco News in a prior interview.

Stay tuned…..

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