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Medellin Cartel Co-Founder Carlos Lehder A Free Man in Gov't. Charade?

by Mike Ruppert Wednesday, Jul. 11, 2001 at 7:09 PM

An investigation into the trial, and "sentence" served by one of the world's largest drug traders. Information into organizations which may have benefit from the money laundering, etc....

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]


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.]


-- 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.


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 .5 and 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


"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),


"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." -- 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 billion

yet only 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 -- 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


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.


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


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


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


"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 resum 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 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]

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


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


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 million. By 1997 the estimated worth of CIG

was listed as 2 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


"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


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 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 0 billion -- during the 1990s. [This

tragedy has been compellingly documented by journalist Anne Williamson.

Information on Williamson's writings can be found at

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


"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 ,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



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

,000. We have invested more than ,000 in this story already. We

anticipate needing at least ,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. ]

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