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HOSTAGES: A Multi-Part FTW Special Investigation

Medellin Cartel Co-Founder Carlos Lehder A Free Man in Gov't. Charade? --
Wife of Drug Lord Speaks
American International Group, Arkansas, ADFA, Contras, Carlos Lehder and
Coral Reinsurance
Connections to 1996 Dark Alliance Series by Gary Webb
Carlos Lehder

[Part One of a Multi-Part Series]

by

Michael C. Ruppert

[(c) Copyright 2001, Michael C. Ruppert and From the Wilderness
Publications. All Rights Reserved. Part I ONLY may be copied and
redistributed for non-profit purposes only. All subsequent parts may be
copied or distributed only with express written consent of the author. ]

[EDITORIAL NOTE - From The Wilderness is a sole proprietorship and dba. It
is written and edited by one person. Me. I do almost all of the research.
Therefore, in the following story, for both legal reasons and for better
reading I have decided to use the personal pronouns "I" and "me" instead of
standard editorial references in the third person.]

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-- This series is dedicated to Mark Swaney of the Ozark Gazette for his
intellectual courage and tenacity; to John McGlaughlin, the straightest and
toughest man who ever honestly carried a badge; to Celerino Castillo III,
with a heart bigger than his beloved Texas; to all the young men and women,
mostly minority, who are serving up to life in prison for crimes that don't
remotely compare to those of Carlos Lehder, and to all the innocents in
Colombia who stand at the brink of the next Vietnam War.

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This is a story about lies. Big lies. Lies that have been told by many
people and organizations and that weave a web of imprisonment for the
American people and many of those who are described in this special report.
It is a story about deception, lies of omission and perhaps commission told
by one of the largest and most powerful insurance companies in the world -
AIG. It is a story about lies told by individuals to protect their self
interest, reputations and fortunes. It is especially about lies told by the
United States government as it continues to publicly celebrate the 1994
death of drug lord Pablo Escobar whilst in massive preparation for military
intervention in Colombia. It is about the now apparent lie that Carlos
Lehder (co-founder of the Medellin cartel) languishes in the American prison
system being duly punished for his crimes. Instead he has, allegedly since
1995, traveled the world a free man, owning as many as five homes and who -
according to a woman claiming to be his wife, speaking on tape (which I have
obtained) to credible third parties - enjoys US State Department protection.

But perhaps most importantly it is about the lies that the American people
tell themselves each day as they drown in a sea of denial, worried about
their pension plans, investments and careers, needing to deny the fact that
the so-called war on drugs is a flimsy house of cards that consumes millions
of innocent lives every year. It is a story about the lies told by the major
media that chooses to ignore the reality of hard documentation about CIA
involvement in the drug trade. If there is a common thread to this story it
is the fact that lies make us all hostages of our own fears and failings.
Eventually these lies entangle us to the point where even the slightest
movement becomes impossible and, being unable to move, we sink and we
drown - all the while looking for someone else to blame.

Denial is not a river in Egypt.

Carlos Enrique Lehder Rivas, aka Carlos Lehder, is the stuff of which
legends are made. Legends are sometimes good, sometimes bad. As is the case
with most legends there is a beautiful woman involved. There is also
intrigue, crime, violence, corruption and betrayal. But legends, when
examined closely, almost always tell more about the civilizations that
create them than they do about the one who carries the name. Carlos Lehder
is not a Colombian legend. He is an American legend. It is America that
created him. America that made him rich. America where he began his criminal
life. America where he was imprisoned and America that, it now appears, has
set him free. It is America's shame that Lehder's freedom, if established,
and alleged employment by the U.S. Government, are hidden behind lies told,
not by Lehder himself, but by the American government to its own people.

In 1979-80, reportedly with the assistance of the CIA and legendary drug
smuggler Barry Seal, Lehder co-founded the Medellin Cartel with Pablo
Escobar and brothers Fabio and Jorge Ochoa. As celebrated on CNN and by
recent books like Killing Pablo (Mark Bowden, 2001), Pablo Escobar was
gunned down in a hail of Colombian bullets directed by U.S. intelligence in
December, 1993. The Ochoas have faded into the jungle-like vortex of Latin
American lore although an October 1999 Reuters story indicated that Fabio
Ochoa had been arrested (again) in Bogota. Word of his promised extradition
to the U.S. has been hard to find. Carlos Lehder remains the only cartel
head to have ever been extradited to, then tried, convicted and sentenced to
life plus 135 years in, the United States. Prosecutors agree that Panamanian
strongman General Manuel Antonio Noriega - against whom Lehder testified in
return for a reduced sentence of 55 "non-paroleable" years in 1989 - was
merely one of Lehder's employees.

Other new material indicating that Lehder, after his 1987 arrest and
extradition, provided information to the DEA that assisted in Escobar's
downfall has been characterized by his prosecutor, former US Attorney Robert
Merkle, as nearly worthless. "That's BS. We didn't need his help to get
Escobar," says Merkle.

As disclosed in this first of a series of special reports, I have now
amassed a sizeable body of documents, records, witness statements and even a
tape recording of Lehder's alleged wife indicating that Carlos Lehder is a
free man who has kept his money, who travels the world freely and who makes
a mockery of any notion that he might be a federally protected witness -
hiding to ensure his safety or the safety of his family. One telling clue to
Lehder's apparent lack of fear is the fact that he is listed by name in 411
directory assistance in La Fayette, California, just outside San Francisco.
My researcher, while looking for other information, came across the listing
and sent it to me. I was able to confirm it as a listing for the Carlos
Lehder - not a coincidence - through confidential sources who know Lehder's
self-professed wife, Coral Marie Talavera Baca Lehder. And I have spoken to
Coral by calling her at that number myself. Mrs. Lehder was, until June 22,
a manager for the insurance giant AIG in San Francisco. [Subsequent segments
of this special series will focus on investigations into allegations of
money laundering by AIG with and through the Arkansas Development Financial
Authority in 1987 - the same year Lehder was originally captured].

I had lunch with Coral two days before she resigned. When I called her San
Francisco office the following Monday, June 25, a company receptionist told
me that she had, "Gone to Cuba."

Coral's reported flight to Cuba cuts off several interesting avenues that
warrant further investigation. Just prior to press time for Part I of this
series, a defense source connected to Lehder's appeal for sentence reduction
told me that their experience indicated clearly that Lehder was still in
prison and that no one named Coral was connected to Lehder in any legal
paperwork. Of all the journalists, experienced investigators and direct
witnesses interviewed for this story, only those who have worked to prepare
his appeals have raised the suggestion that Coral Marie Talavera Baca
(Lehder) is a fraud. The rest have stated that they have long suspected that
Lehder is a free man. So do I. And the possibility that the woman who has
represented herself as his wife for many years has staged an elaborate hoax,
while working for a company long connected to the CIA, only raises an
equally troubling set of questions. Why? For what purpose? To whose benefit?

Just hours before this issue needed to be at the printer's, an e-mail
arrived indicating that Lehder's current attorney (I do not know the name)
had just stated that Lehder was definitely in prison, answered the phone
promptly when called there, had never been married and had allegedly stated
that he had never heard of Coral Baca -- by any name. She was a fraud. At
the same time I have been told that the attorney may not identify himself to
me and probably will not make Lehder available for an interview. This
possible attempt by unnamed sources to delay publication of this story will
be thoroughly investigated for Part II of this series.

"I've been speculating for years that Lehder was free... Why am I not
surprised? If Lehder is out of jail I would be extremely disappointed. It
would send some very bad signals. It's pretty tragic. There's a lot of kids
in jail for the rest of their lives -- I'm talking kids -- and a lot of them
are minorities for insignificant drug offenses compared to what he did,"
says Lehder prosecutor and former US Attorney Robert Merkle. According to
various news sources at the time of his arrest in 1987 Lehder, then 37, was
reported to be worth between $2.5 and $3 billion. Throughout the early 1980s
his airstrip at Norman's Cay in the Bahamas was receiving cocaine flights
from Colombia, every hour on the hour, and transferring the loads to smaller
planes for distribution throughout the US.

Pittsburgh-Post Gazette reporter Bill Moushey, who has perhaps spent more
time tracking Lehder than any American journalist, wrote in 1996, " In it [a
1987 federal detention order] the U.S. government says Lehder and others
were responsible for assassinating Colombia's Justice Minister in 1984; for
the 1985 armed attack on Colombia's Supreme Court building that killed 11
justices and 84 other people; for assassinating two newspaper editors in
Colombia and 26 other journalists; for shooting the Colombian ambassador to
Hungary in 1987; and for a long list of murders of police officers,
informants and other government officials."

Moushey's trail of Lehder grew cold in 1996. "Within weeks of sending that
letter [of complaint regarding the government's alleged failure to honor
terms of secret plea bargain] last fall [1995], Lehder was whisked away into
the night, several protected witnesses at the Mesa Unit in Arizona say. No
one has heard from him since." However he has since indicated that, as of
late 1995, he believed Lehder to be in prison.

I have since talked nearly a dozen reporters, prosecutors and others
connected to the case. At the same time that they protest that they have
received Christmas cards, letters and even phone calls from Lehder
indicating that he is still in prison they all - every one of them - have
confessed their secret suspicions of a charade intended to fool them and
hide a very dark secret. And all of them, without exception, agree that if
Lehder is walking free it is time to find him and tell the American people
about it.

Days of Glory - Days of Shame

I first became aware of Carlos Lehder's possible freedom in the Spring of
1997, not long after I had confronted CIA Director John Deutch on television
and stated that there was direct proof of CIA involvement in the drug trade.
Dick Gregory, the comedian, later told me that he had learned first hand
that my confrontation with Deutch, and Deutch's poor handling of the
situation, had cost Deutch a certain appointment as Secretary of Defense the
following month. I was something of a small-time celebrity afterwards. At
that time, however, those of us like retired DEA Agent Celerino Castillo, a
Bronze Star recipient from Vietnam who has devoted his life to exposing CIA
drug connections in the eighties, stood downstage from Pulitzer Prize
winning journalist Gary Webb whose August 96 Dark Alliance series in The San
Jose Mercury News had inflamed the nation with its allegations of direct CIA
connections to the Contras in Nicaragua and drug trafficking in LA.

In late 1996 I was approached by the publisher of the magazine Prevailing
Winds, Patrick Fourmy, a young Canadian videographer who was also
perennially scrambling to raise money. In several of our meetings Patrick
talked openly of how a woman named Coral Baca had instigated Webb's
investigations by providing him with secret federal grand jury transcripts.
[Although widely ridiculed or ignored by the mainstream media, many of
Webb's allegations were later corroborated in detail by a CIA Inspector
General report released on October 8, 1998 and by a Department of Justice
report released almost a year earlier.] On various trips and a meeting where
Fourmy videotaped an interview with me, he almost boasted about the fact
that Baca was engaged to Carlos Lehder. He claimed to have been the one who
"introduced" Baca to Webb by giving her Webb's office phone number. It
bothered me. But I was broke, unemployed due to an injury, and unable to do
anything but ask, "Doesn't that bother you a little?"

I met with Patrick maybe three times between then and the summer of 1998. At
one time he told of having actually met Lehder whom he repeatedly said was
out of prison. Other confidential sources, close to the Lehders, have told
me that Fourmy actually visited "the house" and videotaped an interview with
Carlos Lehder. I didn't see Patrick much after that. Contacted with written
questions for this story by e-mail and fax at his Santa Barbara offices,
Fourmy has not responded to my requests for comment. I have been unable to
locate a working phone number for him.

On June 28, 1998, just about two weeks after Webb's book Dark Alliance had
been released I was invited to attend a fund raiser at the Beverly Hills
home of Producer Jamie Otis and organized in part by Patrick Fourmy who did
the videography and arranged hotel accommodations. The purpose of the "gala"
event featuring Webb as a speaker, was to raise funds for "citizen's
tribunals" to be conducted by the Institute for Policy Studies in
Washington, D.C. I had just finished reading Webb's book and found it to be
ground-breaking and well documented. In the first pages of Dark Alliance
Webb wrote about his first meeting with Coral Talavera Baca, the woman now
known as Mrs. Carlos Lehder. In retrospect Webb's description of her seems
ponderous.

"I turned, and for an instant all I saw was cleavage and jewelry. She looked
to be in her mid-twenties. Dark hair. Bright red lipstick. Long legs. Short
Skirt. Dressed to accentuate her positive attributes. I could barely speak.

'You're Coral?'

She tossed her hair and smiled. 'Pleased to meet you.' She stuck out a hand
with a giant diamond on it, and I shook it weakly." - (p.6).

Earlier, on page 4, Webb had written that Coral worked for a law firm. What
he did not report was that the law firm was solely devoted to legal work for
AIG and that AIG had long standing ties to the CIA. Rather than reporting
that Talavera was engaged to Lehder -- which he claims he could not
establish -- Webb wrote in Dark Alliance that she was the "girlfriend" of
convicted San Francisco Bay Area drug dealer Rafael Cornejo.

The night of June 28 and the following day can best be described as surreal.
Coral and Webb arrived together and she stood by him as he spoke that night.
She looked more elegant than Webb had described and she was truly stunning.
Fourmy, who was busy with cables and cameras kept pointing her out and
saying, "she's engaged to Carlos Lehder. I introduced them." Fourmy spent
much time that night with crime writer and author Joseph Bosco who made a
strange statement to me towards the end of the evening. "Gary Webb should be
ashamed of himself for what he did to Coral." I have been unable to find out
what Bosco meant.

Fourmy, Bosco, Castillo and Coral were all staying at the Beverly Garland
Howard Johnson's in North Hollywood California. Although I was briefly
introduced to Baca [I use the names Talavera and Baca interchangeably to
reflect how she was addressed in various settings] just before she left the
event in a taxi cab, and didn't quite know what to say, it turns out that
she was more forthcoming in a conversation with Castillo. Just days after
the event Castillo called me and told me what she said that night and the
following day. He has since reconfirmed those statements for this story.

"I remember that I was introduced to her by Fourmy," says the retired DEA
agent who has served in Peru and Central America. "She said, straight out,
that she was engaged to Carlos Lehder... I couldn't believe it! What was she
doing here? I asked her, 'What's Carlos doing now?' and she said, 'Oh, he's
out of jail and selling drugs to the Russians for the CIA.'

"I mean it just knocked me for a loop. It scared me. And then the next day
she was out by the pool. Patrick [Fourmy] was there. Joe Bosco was there.
She came down and sat with us. She was quite open and she said that her
company -- a company she owned that I later found out was Capital Investment
Group -- was owned by five of the largest drug dealers in South America. She
was very agitated at the government and she said that the government had
contacted Carlos and told him to 'put that bitch on a leash.' That, said
Castillo, was probably because of her openness in talking about the fact
that Carlos was out of prison and her public appearances with Webb. I have
confirmed that Baca made at least one other public appearance with Webb at a
book signing in Los Angeles.

Contacted at a New Orleans phone number, Joe Bosco has not returned a call
requesting comment.

Maxine Waters -- From the web site of Congresswoman Maxine Waters (D),
California:

"I also had numerous telephone conversations with Coral Talavera Baca, the
girlfriend of Rafael Cornejo, who was a relative and part of Norwin Meneses'
drug trafficking organization, as well as a long-time business partner of
Danilo Blandon, another central figure in the "Dark Alliance" series. I
received information from Ms. Baca and Mr. Cornejo who were connected to
Carlos Lehder, a Colombian drug dealer and co-founder of the Medellin
Cartel. It was through Lehder's private island that the Medellin Cartel
moved massive amounts of cocaine to Miami and the United States. Ms Baca had
visited Carlos Lehder's private island and have [sic] information regarding
the connection between Mr. Lehder and Norwin Meneses." --
http://www.house.gov/waters/31698pr.htm. Contacted for comment, Waters'
office had not responded at press time.

George Taylor -- George Taylor is a convicted felon. He has been part of the
Federal witness protection program known as Witsec. On June 18, 1996 he gave
sworn testimony before the Senate Judiciary Committee then looking into
serious problems with the program. In his testimony he stated:

"The Units also housed one of the most sought after drug Kingpins in the
world. Carlos Lehder Rivas, leader of the Medellin Cartel. Lehder admitted
to ordering hundreds of killings, including a member of the Colombian
Supreme Court, politicians, and reporters. His net worth is over $3 billion
yet only $2 million in assets were ever seized. I reviewed Lehder's plea
assessment, he was convicted and sentenced to life plus 135 years with no
chance for parole. And then he joined the program by agreeing to testify
against Manuel Noriega, who in effect worked for Lehder. Federal officials
immediately cut Lehder's sentence to 55 years with eligibility for parole.
[This eligibility is disputed by a member of Lehder's defense team who spoke
on condition of anonymity]. Further sentence reductions made him eligible
for deportation to Germany, his homeland. I have been told that Lehder is
already in Germany.

"While in the Unit, Lehder developed new drug smuggling plans for after his
release. He talked of a new frontier in the former republics of the Soviet
Union. He and [convicted Gambino crime family Capo Sammy the Bull] Gravano
talked of forming a partnership in a new cartel using money given to them by
our government. They asked me to join them and I turned them down.'

Gary Webb -- Contacted for comment Gary Webb responded: "Coral's
relationship with Lehder, if there was one, was not very pertinent to what I
was looking at." Webb said he saw correspondence suggesting that she and
Lehder may have had a relationship a long time ago but whatever the nature
of that relationship was or is, it was her private business and had no
bearing on his inquiries as far as he could tell.

Robert Merkle -- "I know that Lehder, right after he was arrested, tried to
cut a deal directly with [then Vice President George H.W.] Bush and the
FBI - which conversations I was excluded from... There's a lot of stuff that
went on that was questionable...I've been speculating for years that Lehder
was free but I figured he'd be in Germany or some tax haven with his money,
which he still has... One of the major things that was a red flag in terms
of indicating that he made a deal was that Lehder wasn't required to turn
over his assets... There was essentially nothing seized in that case and the
guy made millions of dollars. If I'm a U.S. Attorney or an Attorney General
and the only member of the Medellin Cartel to be prosecuted in the US,
facing life plus 120 years in jail, wants a deal, the first thing he's going
to talk to me about is money. What banks? Where are they located?"

Texas is a One-Party State

Far and away Celerino Castillo's allegations are the most outrageous. They
demand a level of scrutiny beyond the denials or silence of the other
parties involved.

Under Texas state law, unlike Maryland where tape recordings of phone
conversations unauthorized by both parties proved the undoing of Monica
Lewinsky and resulted in legal action against Linda Tripp, Texas is a state
where only one party to any telephone conversation need grant permission
before recording a call. As a result of a number of investigations
connecting to the CIA in which he was then involved, Castillo had his
telephone set up to automatically record all incoming calls. This proved
fateful when he received a call from Coral in April of 1999. Castillo and
Baca had been in touch infrequently since the June, 1998 fund raiser. Baca
had been suggesting that she might be able to get Castillo work as an
investigative consultant on a legal case connecting to the CIA in San
Francisco and had even paid one phone bill for him in the preceding months
as a partial expense payment for that case. Castillo's early retirement had
resulted from his efforts to expose CIA involvement in Contra-connected drug
trafficking during the eighties and has been documented in his 1994 book
POWDERBURNS - Cocaine, Contras and the Drug War.

In June, 2001 I traveled to San Antonio Texas where I met Castillo and
obtained a copy of one of his "Baca" tapes. He says there are others he is
holding as "insurance against any challenges against me" and that the one he
provided me has had certain sections of the conversation removed for the
same reason. [Beginning in August 2001 I will place selected excerpts of
this tape, converted to MP3 format, on the From The Wilderness web site at
www.copvcia.com. -- See Investigation Notes at the end of this story.]
Having spoken to her on the phone several times since January 2001 I
instantly recognized the voice on the tape. It was definitely the Coral that
I had met.

Following are excerpts from the forty-plus minute conversation: (CC
designates Celerino Castillo. CB designates Coral Baca. Certain segments of
the tape have been edited to protect innocent third parties and to save
space.)

CB: We're living in both places now. We're in Florida now. We did have, we
still have the house in Boca Chica. But we've also got one in Coconut Grove.

CC: Oh. Good.

CB: So it works out really, really nicely. I'm here three days a week.

CC: Then you're flying back.

CB: ...So it works out really, really nicely actually. I thought it was
going to be exhausting but it's not. It's really kind of nice because when
I'm here I really have some time to myself, you know, running the business
[AIG]. I shouldn't say that, running the office.

CC: Oops.

CB: They'll turn that [laughs]. That is a great one.

CC: [Laughs] Ooh - running the business.

CB: I've got to be very careful what I say, you know. Yeah, but um, it's
really nice. If you ever get down there you're more than welcome to come and
visit and stay. I love Florida. It's really beautiful.



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CB: You know because I hear things, like there are going to be hearings on
this mess [The Gary Webb Dark Alliance series]. Let me tell you something.
I'll tell you something and I've heard it from people who have been informed
by very reliable people in the government. No there won't. No there won't be
any more hearings.

CC: But even if there were any hearings...

CB: It's just going to be a joke.

--------------------------------------------------------------------------

CB: I've read such ugly articles lately. We attended some benefit. And
somebody wrote an article and they titled it Beauty and the Beast. Is
that...

CC: God Damn...

CB: Is that fucking cruel? I mean like he is like the nicest man, the most
generous man I have ever met. And to call him a beast?

CC: What newspaper was that?

CB: Oh, who the hell knows. I don't even know. I get so upset that people
keep these things from me.... How about all the money he gave me to start an
orphanage in Mexico.

---------------------------------------------------------------------------

CB: He was out of jail before I went to Gary.

CC: Oh yeah, well I know that was in, we know, during the Panama thing.

CB: Well no. He was released in 95. In March of 95. I didn't go to Gary
until June - or July - of 1996. [NOTE: This date is disputed by both Webb
and me. It would have given him roughly six weeks to write the entire Dark
Alliance series.]



--------------------------------------------------------------------------


CB: Do you know a DEA Agent named Rafael Salcedo or Armando Medina.

CC: Yeah, those names sound very familiar.

CB: Those guys used to moonlight for the CIA all the time.

CC: Yeah, there's a lot of them. The last one I heard was Juan Perez who was
a Cuban...

CB: I know who he is, of course...

CB: We just saw Robert Vesco.

CC: Who?

CB: Vesco, Robert.

CC: What about him?

CB: We just went and saw him when we were in Cuba.

CC: Is he under house arrest? Cause that's what I heard.

CB: What a great man. A Sweetheart.

CC: [Laughing] How's Fidel doing?...

[CB: We had gone down once maybe a year or so ago and I met him [Vesco] for
the first time then. And then when we

went back this time I met him again...I mean he's old and he walks with a
cane. He's just a sweetheart though.

That's what Fidel did for him. He took him in because the United States was
ready to just nab him. I mean you know how the United States is. They kidnap
people and they call it extradition.

CC: So, is Carlos still playing ball with...?

CB: He has nothing to do with the business.



-------------------------------------------------------------------------


CB: In fact we're having a birthday party this weekend. What are you doing
this weekend? I'm 29 - again. [Laughs] A little party. Just a hundred of our
closest friends. It's going

to be really, really fun. I think Julio Iglesias. He's going to sing. He's
like my all time favorite. He's in Florida anyway.



--------------------------------------------------------------------------


[Baca enters into a lengthy discussion regarding a suspect who had allegedly
burglarized her e-mail accounts. Because these are criminal allegations and
I have been unable to ascertain the validity of the charges I have omitted
references to the named suspect.]

CB: Because of Carlos' situation the State Department called in the FBI to
find out who was doing this... And then he got into my e-mail account, my
Coral Lehder e-mail account, and they were e-mailing Carlos from my e-mail
account...

CB: He got into our e-mail account and was reading all of my correspondence
with, back and forth between Carlos and me.

CC: How did he do that?

CB: Well it's not too hard if you're close to somebody. It's not too hard if
you know what words are important ...

CC: Oh my God. So, what did the FBI... Are they going to bring any charges?

CB: See, there's another point of contention. My other half is very pissed
off and me, no, I'm not going to do that. He has to live with the fact that
what he did [was] wrong...

CC: So the FBI came and they...

CB: The State Department, once I found out that my e-mail was being broken
into, I told Carlos. And Carlos said,

"You know what, it makes sense "Because I knew that some of my e-mails just
weren't right." He's like, "I knew somebody had looked at them." So he
called in I guess, whoever he has to report to, it's a matter of his
national security status, that his security might have been jeopardized. And
the Feds got involved, you know, because they called in the Feds. - It was
an ugly ordeal. Do you know that we had to go to a safe house, because they
didn't know who it was? ...

CB: There were never wedding invitations... I never sent out wedding
invitations. What was sent out after was like notifications... You got the
one that said, "Please extend her every courtesy as my wife..."

---------------------------

."I had several conversation with Coral," says Castillo. "There is no doubt
in my mind that Lehder is out of prison. None whatsoever. I received an
e-mail from Carlos personally, in the summer of 1998, that invited me to
come to the wedding that fall. Carlos had taken her out of the country for
personal reasons. I also received an e-mail from Coral under a separate
account. The address was snowqueen@h... I can't get to those e-mails
now because my old computer is broken and I don't have the money to fix it.
But she was clear on many occasions that Carlos was out. She talked about
travelling all over with him. Why would they have invited me to the house,
or to visit them in the Bahamas if it weren't true? What if I had said yes?
They were going to pay for it but I didn't go. I didn't want to compromise
myself.

"I think Coral is really against the government and the war on drugs. She
has family in jail and she spoke to me I think because of the price I paid
for what I did. I believe that she hates the CIA."

Asked about the possibility of an elaborate ruse by Baca, Castillo replied,
"Look. You almost have to go to more trouble to justify the notion that he's
in prison than you do to justify the position that he's out. What could
Coral possibly have gained from all this effort to make certain people think
so? They both hate the government and would love to make it look bad. She
had a powerful position at AIG that would be jeopardized if she were exposed
as making this up. Why would someone go to all this trouble to make people
think she's his wife? It's not something you would put on a resumé. It has
drawn attention to Lehder rather than steer it away. What does she gain by
that? I know that some people insist he's still in jail but why won't the
government just say so? Instead you have this big mystery that only deepens
the legend. Who benefits from that? Who profits from the confusion? And the
government would have found out about it. That's why I think the government
went to Carlos and said to put a leash on her."

A Paper Trail

Far from being silent about Talavera's relationship with Lehder I had
written about it in January of 1999. I had been puzzled as to why no one in
"the anti-CIA drugs movement" seemed to think it noteworthy. It was known to
at least a dozen people that I was aware of. It was "sticky" to me, oozing
with a kind of dysfunctionality found in families that conceal child abuse.

Information developing around the then pending Clinton impeachment had led
me to suspect an alliance between the Medellin Cartel's genius of
transportation and Arkansas' genius of money and political power, Bill
Clinton. [See Parts II and III of this series.] My writing on this subject
(available at www.copvcia.com) had drawn an angry January 7, 1999 letter
from Talavera's attorney. I made a correction stating that at the time of
the Dark Alliance stories Talavera was probably not married to Lehder when
she went to Webb but that she was indeed his fiancée. What I found
interesting in the letter was that Baca's attorney, David Secrest, had
written, "We also demand that you immediately take all steps necessary to
respect Ms. Baca's privacy and anonymity, as did the Dept. of Justice and
the CIA in their respective reports." Why were those agencies been
deferential to her? If she was a fraud, couldn't they discover it? My only
error, since scrupulously corrected for this story, was in not seeking her
comment before writing. I could have.

I stand by that story and no lawsuit has ever materialized. [The letter may
be viewed at www.copvcia.com.]

Shortly after that my fax machine began to hum. On six occasions over the
next twenty months an unknown source, being careful to disguise the point of
origin, sent anonymous faxes to me containing a variety of documents ranging
from news clippings and magazine stories, to supposed surveillance photos
and reports, to official U.S. government documents all pertaining Lehder and
Baca. All of the purported news clippings lacked publication names and
dates. I had decided to write about these documents in the summer and fall
of 2000 and began checking them out. It turned out that many of those
documents were fakes, elaborate fakes, which someone had gone to a great
deal of trouble to prepare. Several purported to be from an unspecified
"Office of the U.S. Attorney." After learning that some of the documents
were faked I contacted many government agencies in attempts to verify the
authenticity of the rest. The results were inconclusive. One document,
allegedly reporting that the Lehders received 24/7 overseas security at
their home in Salinas Equador from the State Department's Office of
Diplomatic Security, had drawn an angry, "I can unequivocally tell you that
we have never protected either one of those people. Sounds more like CIA to
me," response from Bob Franks. Franks was qualified to give the statement.
At the time he was (and is) the Director of Protection for the State
Department's overseas security operations.

Other documents, in particular an undated two-page "Report of Investigation
(Law Enforcement)" from the U.S. Treasury Special Agent In Charge, San
Francisco District Office (possibly the IRS), appeared credible but remained
unverified. The "Treasury" report, which was later to become very important
to this story was, in November 2000 -- after seven phone calls, a fax, a
Fedex package and much delay, evaluated by Treasury Dept. spokesman John
D'Angelo. He told me, "I have not been able to figure out what this report
is. I can't figure it out. Things don't match... It looks like something
that was used at one time." That decidedly unsatisfying response had come
after Treasury spokespersons had advised that I contact each of Treasury's
component agencies (IRS, Customs, Secret Service and the ATF) for comment.
Of course, each of those agencies had referred me back to where I had
started.

What was so compelling about the Treasury report was that it contained a
wealth of information on the Lehders that was to be subsequently confirmed
by Talavera herself. More damning is the fact that in June 2001 I secured
confirmation from a confidential source close to the Lehders that the
document was authentic. Then, a former senior paralegal who had worked on
Lehder's appeals efforts (speaking on condition of anonymity) found it to be
possibly authentic and "consistent with other government documents I have
reviewed in the case." Just to be sure I asked the paralegal for a place to
check the paralegal's credentials vis a vis Lehder. That was instantly
provided and credible confirmation was instantly given. "Kincaid," as I have
named the source, had worked for a law firm representing Lehder and knew him
personally.

The Treasury report stated that in 1987 (when she was 23) -- the same year
that Lehder was captured and would have begun hiding his assets -- Talavera
had founded a "Bohemian" company called Capital Investment Group (CIG) with
an initial capitalization of $10 million. By 1997 the estimated worth of CIG
was listed as $132 million. In financial parlance a "Bohemian corporation"
is a company founded by two parent companies, located in two different
countries, in yet a third country. This is usually done for the purposes of
avoiding regulation by tax or legal authorities. The first thing I had done
after receipt of this document in the summer of 1999 was to ask my
researcher to pull the files on Capital Investment Group at the Secretary of
State's office in Sacramento and send them to me.

Among other things, the Treasury report says that Carlos Lehder was an
employee of the Treasury and a free man.

Another document, typeset like a news story but well sanitized to remove the
publication name or date was titled "Beauty And The Beast." It read, "Just
three days after the birth of her son, Carlo Rafael, the lovely Coral
Lehder, adorned the arm of her husband, one-time Medellin cartel cocaine
kingpin Carlos Lehder, during St. Jude's Children's Hospital annual benefit
where Mrs. Lehder was honored for her exemplary work with underprivileged
children.

"When asked to comment on the recent birth of his son, Mr. Lehder coyly
remarked, "Once again it appears I have received a lot of quid [gesturing to
his wife] for very little pro quo. America, where anything is possible. Even
a beauty like that loving a wretch like me...," The quid pro quo statement
rang a bell. I checked my files and found a June 15, 1996 story by reporter
Bill Moushey that quoted prosecutor Merkle as stating that Lehder "received
a very large quid for a very small quo." Sources familiar with Lehder and
his speech patterns have indicated that he has never been this eloquent and
never uses Latin. But could he have been taking a subtle, mocking swipe at
the man who had tried to put him away? In the quote the Latin grammar was
butchered. He should have said quo, instead of pro quo.

On the lower right hand portion of the page a photo of a reclining Coral
bore the caption, "There's a lot more to being good looking than make up and
prettiness. There's a lot more to being a woman than that. When I look in
the mirror, I just want to like myself. And if I like myself, then I look
good." -- Coral Lehder.

One of the things that made the document suspect was a heading at the top of
the page that read, "Commentary." This term is usually used in journalism to
designate a serious editorial piece. This was pure society page stuff. The
clipping had either been camouflaged to disguise its source or else this was
another fake. Before becoming aware of the Baca tape in Castillo's
possession I had attempted to locate the source of the story without
success. St. Jude's Regional Director Paul Withraw told me in November 2000
"Anyone here now was not here then [early 1999]. We do not have an annual
awards banquet." He denied knowing anything about Mr. and Mrs. Carlos
Lehder.

Trying again, after hearing a reference to the story on the tape in June, I
was able to locate a receptionist at St. Jude's regional offices named
Gladys who was a little more forthcoming. "Oh, that was probably the Miracle
Cup in Miami. It was a formal in March of 99. I remember it well. Julio
Iglesias sang there. He's great. I'll have someone call you."

I'm still waiting for the call. However, knowing that Coral's birthday party
in 1999 was held on Saturday, April 17 [her actual birthday, as confirmed by
her, is on the 18th] I called Anchor Marketing, the Miami management company
representing singer Julio Iglesias, and asked what he had been doing that
day. A woman named Myra told me that he played at Cesar's Palace in Las
Vegas but could not confirm that he did not privately attend another
function (like a birthday party) either before or after.

Still the faked documents forced me to put the investigation on hold. It was
not until January of 2000, when the fax machine received an unsourced
newspaper photo caption stating that Talavera had served as a technical
advisor on the movie Traffic, that I reached out to Talavera directly to
find out what the hell was going on. The Traffic clip had particularly
offended me because I had been meeting and talking during the preceding
weeks with the personal manager (Patrick Dollard of Propaganda Films) for
Traffic's director, Steven Soderbergh. I knew that Coral had nothing to do
with the film. Arriving with the Traffic clip was another document the
government already knew I had and knew that I knew was a fake.

So, in January I contacted Coral to ask about the documents. I wanted as
much to know who had sent them and why as to find out whether they were
real. That contact led to a number of private conversations in which I was
satisfied that the sender had intended personal harm to Coral and possibly
to me if I published them. Lacking the ability to further authenticate those
documents that I believed to be accurate, I assured Coral that I had no
intentions of going to press or discussing personal information she had
revealed in helping me check them out. I have since learned that several
other journalists had received many of the same documents and withheld them
for the same reasons. Curiously, however, none seem to have received the
Treasury report.

It was during this period that I first learned of Talavera's employment by
the American International Group (AIG) in San Francisco. She had given me
contact numbers at her San Francisco office and sent e-mails and faxes so
indicating. Included was a February 13, 2001 fax sent unsolicited to me and
author Peter Dale Scott, PhD, Professor Emeritus at UC Berkeley. The cover
sheet had a letterhead in the name of Coral Marie Talavera Baca and showed a
street address at Two Rincon Center. This is the address of the AIG building
in San Francisco. The cover sheet showed a return e-mail address of
Coral.Talavera@A... The heading read, "RE: Penthouse article re:
Carlos/Atlantic Monthly article."

The message on the cover sheet said, "Dear Peter and Michael: Attached
please find The Atlantic Monthly article regarding the CIA, which I am
passing along for your pleasure. I got a good chuckle out of it... hope you
both do also. It's nice to know that others find humor in the CIA's
incompetence. -- Regards, Coral."

[NOTE: This document, the Treasury report, and other on-the-record e-mails
concerning this investigation and confirming a June 20 lunch date for
Talavera and me can be viewed on my web site at www.copvcia.com. Go to the
section for this series of special reports and, from the Table of Contents,
click on "Support Documentation."]

Coral Reinsurance

In the Spring of 2001 I was checking my e-mails when I opened one from a
colleague that immediately caught my attention. It was titled "Google Search
for AIG + Goldman + Harvard." Several themes immediately sprang to mind.
First, I was aware that Coral was a manager at an American International
Group (AIG) legal office in San Francisco. Coral's name was the same as the
subject of the story attached to my e-mail. Secondly I had, through my
newsletter From The Wilderness (FTW), been writing for many months about the
roles played by Goldman Sachs, its past President, Robert Rubin (former US
Treasury Secretary) and The Harvard Endowment in the massive looting of
Russia -- to the tune of as much as $300 billion -- during the 1990s. [This
tragedy has been compellingly documented by journalist Anne Williamson.
Information on Williamson's writings can be found at www.newsmakingnews.com.
Her forthcoming book on the subject, Contagion, is to be published in serial
form by SRA Associates in London.]

The extract attached to the e-mail described a suspicious relationship in
1987 between AIG, the Arkansas Development Financial Authority (ADFA) and
Goldman Sachs, then headed by Rubin, to found an offshore (Barbados)
reinsurance company named Coral Reinsurance. (Reinsurance is simply the
insuring of one insurance company by another to spread risk).

According to a confidential Goldman Sachs stock placement memorandum dated
December 1, 1987, which I have since obtained, Coral Re, as it is known, was
founded by AIG. All potential investors, including the State of Arkansas'
ADFA, were bound to return or destroy the memorandum if they did not
participate. Coral Re was clearly an AIG progeny and ADFA has been
voluminously linked to allegations of drug money laundering in the 1980s.
Moreover, there are also longstanding published links, some confirmed by CIA
documents, between drug smuggling, Barry Seal, the Contras and the Medellin
Cartel. All of those links joined at the Mena (Arkansas) Regional
Intermountain Airport. [These subjects will be discussed in detail in Parts
II and III of this series.]

This was something I had to investigate. I was aware of AIG/CIA ties dating
back to the early fifties. From reading the full text of a 1995 story
entitled Gray Money by journalist and mechanical engineer Mark Swaney I
learned that the CEO of AIG, Maurice (Hank) Greenberg had also been a
candidate to become CIA Director in 1995. Greenberg is also the former
Chairman of the New York Federal Reserve Bank.

In a number of e-mails, phone conversations and one face to face meeting
Talavera consistently denied that she, her husband Carlos Lehder, or their
good friend, fugitive financier Robert Vesco, had any connections of any
kind to Coral Reinsurance. Notwithstanding that my investigation into that
possible connection continues. If she is officially labeled as a fraud what
then does one make of her denials about Coral Reinsurance? Of AIG as her
confirmed employer? On June 12 she e-mailed, "Carlos is in no way, shape or
form had/has anything to do with Coral Reinsurance and or AIG's involvement
in same.

"Let me save you the next question. Robert Vesco had/has nothing to do with
the above either. [I had never mentioned to her that I knew about Vesco.]
Let me go one step further. No one that I know had/has anything to do with
Coral Reinsurance and/or AIG's involvement in same.

Coral later agreed to meet me for lunch on Wednesday June 20, across the
street from her San Francisco office. Before leaving for San Francisco I had
occasion to speak to an AIG spokesman, Michael Murphy of Bermuda, said by
many in the insurance business to be Hank Greenberg's right-hand man. To my
question regarding Coral's status as the wife of Lehder Murphy responded, "I
asked her the question whether that was her past and she said that she
really preferred not to discuss her personal affairs in a company
situation... I didn't want to pry into her life."

The Russians Are Here

I went up to San Francisco a day early. With the Secretary of State
documents in hand I went to see what I could find out about Capital
Investment Group (CIG). Its address, 601 Gateway Blvd. is a new, large,
approximately ten story office building near the San Francisco airport. The
incorporation papers showed that CIG had been there for at least three years
until their corporate filings ceased in 1997. I poked around until I found
someone on the building staff who had been there in the mid 90s.

"Oh yeah," said the building employee who asked that I not use his name. "I
remember the Russians. There was Boris and Vladimir and Natasha." He
laughed. "Real thick accents. They treated the eighth floor like it was
Russian territory. Everyone knew about the Russians. The FBI came and were
investigating them. They said they might be KGB."

The employee remembered one other thing. "They had so many extension chords
running into so many computers that they blew the fuses in the building six
times a day. Everyone was complaining about them. They left in 96 I think. I
have no idea where they went after that."

Doing Lunch

Don't laugh. The name of the restaurant where Coral and I had lunch was The
Red Herring. I stood waiting for her out front at noon. She came across
Steuart Street wearing a black dress and pearls. She was and remains every
bit as lovely as I had remembered. But during the lunch, I found her to be
more elegant than vixen, more intelligent than bimbo, more loyal to her
husband Carlos Lehder and much more "savvy" than Gary Webb's description had
led me to expect. She declined to answer any on-the-record questions about
the status or current activities of her husband or her family. The purpose
of the lunch was to thank me for not publishing the faked documents and to
discuss Coral Reinsurance.

Coral repeated all of her earlier categorical denials of any involvement
with Coral Reinsurance. The same went for Carlos and Vesco. She stressed
that Lehder had absolutely nothing to do with the drug business any more. A
question about Capital Investment Group's possible involvement got her
agitated after I told her what I had discovered at Gateway Blvd. the day
before.

"The last thing I need is to be connected with any Russians!," she said. "My
Capital Investment Group is in the Bahamas. I fund an orphanage with it.
That's all," she said. I produced a copy of the Treasury report and she went
through it line by line looking for information about CIG. While not
confirming that report was authentic she did not dispute any information it
contained with one exception. She confirmed that the aliases of Coral Marie
Talavera, Coral Marie Baca and Coral Marie Lehder were correct. The date of
birth was correct. The relationship with Lehder (the employee) and Talavera
(the subject) was at least 18 years old. She breathed a sigh of relief to
read the information showing Capital Investment Group having been founded by
her in 1987 and agreed with the statement that she and Lehder were the only
shareholders. An entry indicating that in 1995 she had been instrumental in
negotiating Lehder's release from the Bureau of Prisons drew a nod. She made
no comment about the fact that the report showed that she had been
investigated by the FBI, Department of Justice, Department of Defense and
the CIA by means of traditional investigation, "wiretaps" and informants."
She also did not question the fact that the report showed her and Lehder as
having multiple residences in Oakland California; San Francisco; Boca Chica,
Florida; Salinas Ecuador; and Great Exuma, the Bahamas. Her net worth was
conservatively "estimated" at $7,369,024.

The only item on the report she disputed was a statement indicating that she
might possibly be Lehder's adopted daughter. That made her angry.

Turning back to Capital Investment Group she said, "Capital Investment Group
is my company. But I work for AIG. My company has nothing to do with these
Russians. This Coral Reinsurance is a good story. You should go after it." I
remembered that in an earlier conversation where she was giving me
on-the-record quotes about her non-involvement with Coral Reinsurance she
had said that reinsurance was a great way to launder money.

Coral told me that she was planning on leaving AIG in December. That, she
said, had nothing to do with my work on Coral Reinsurance. We then talked
about the painful experiences I had had many years ago when, as a young
policeman in 1976, I had fallen in love with a female CIA agent and come
across evidence of CIA involvement in the drug trade. My refusal to go along
with her work cost me the relationship and my attempts to expose CIA
wrongdoing had cost me my career. I remarked that my lover had been every
bit as beautiful as Coral. I had been left with an obsession that had lasted
for many years. As we left the restaurant Coral turned to me sympathetically
and said, "Who knows. Maybe one day there'll be a knock at your door."

As I shook her hand goodbye I answered, "I've worked through that... I would
be immune now."

During the lunch I mentioned the fact that someone connected with Carlos'
defense (Kincaid) was trying to reach him and I mentioned the name. This is
the senior paralegal who has given me information for this story. After the
lunch I sent an e-mail to Coral saying that I had given the paralegal
Coral's office number and that she would be calling. I had no wish to
interfere with attorney-client privilege.

The following Monday Kincaid called me at my Sherman Oaks office and told me
that Coral had resigned on Friday, two days after our lunch and gone to
Cuba. An immediate call to the receptionist confirmed this. Coral was gone.

Official Responses

The State Department -- State Department Spokesman Andy Laine, speaking on
behalf of Bob Franks said, "What Bob told you last November still holds
true. We are not providing security for him [Lehder] or his wife."

The FBI -- A spokesman for the San Francisco Office of the FBI stated that
he is unaware of any such (wiretap or e-mail) investigation."

The Department of Justice -- Asked on June 28th to state whether or not
Carlos Lehder is still in prison and/or a member of the Witness Security
program or whether he was an employee of the U.S. government, spokeswoman
Susan Dryden stated that she would look into it and have someone call me
back as soon as possible. As of press time a week later, no one has called
me back.

The Treasury -- After three phone calls and voice mail messages resulting in
no response, Treasury spokesperson Tasia Scolinos stated on June 29th that
she did not know the John D'Angelo whom I had spoken to last November and
did could not find the material I had sent him then. I found this strange
since she gave me the same phone number I had used to reach D'Angelo and she
had replaced him. She asked me to write a detailed request for the
information I was seeking (which I did) and send her another fax of the
document (which I did). She then suggested that, because the document had
been stamped "Sealed by the Court" that I visit each court house in the San
Francisco Bay area to see if I could find the file. She would consult an
attorney at Treasury and get back to me. As of press time I have received no
further response.

Question: If, after this story breaks, the Department of Justice holds a
press conference and invites CNN and TIME into a prison to interview and
photograph Carlos Lehder, will anyone believe that he will still be there
the next day?

ACKNOWLEDGEMENTS: - Special thanks to: Mark Swaney, Al Giordano, Lois, Lara
Johnson, Linda Minor, Dave Hendrix, Marc Harris, Carolyn Betts, Catherine
Austin Fitts, Kincaid, and Peter Dale Scott.

COMING NEXT MONTH: The Hunt for Carlos Lehder Continues * ADFA, Arkansas and
Mena * The Medellin Cartel and The Contras * AIG * Coral Reinsurance



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Investigation Notes

I am sure to be criticized for all of the things that we could have
investigated for this special series, but didn't. Bear in mind that in 2000
the gross income for FTW, aside from honoraria and outside writing, was
$40,000. We have invested more than $8,000 in this story already. We
anticipate needing at least $5,000 more to complete it.

Can you imagine what kind of investigation The New York Times could have
produced using 20% of its gross annual income.

While we appreciate the calls from activists telling us that they have made
20 copies of FTW and handed them out for free, we ask that all of you who
are due for renewal, or who want to assist us in this important project, dig
deep and send us your money.


All we have to offer you is the truth. In a ham and eggs breakfast the
chicken is involved but the pig is committed.



[(c) Copyright 2001, Michael C. Ruppert and From the Wilderness
Publications. All Rights Reserved. Part I ONLY may be copied and
redistributed for non-profit purposes only. All subsequent parts may be
copied or distributed only with express written consent of the author. ]