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He Cut His Teeth on a Contra Probe

Secretary of State John Kerry is wise to corruption abroad—and at home.

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Tuesday, February 12, 2013

John Kerry brings more to the post of Secretary of State than a willingness to be a presidential administration’s mouthpiece. His passion for foreign affairs has been lifelong.

In delivering the class oration when he graduated from Yale in 1966, Kerry, the son of a foreign service officer, criticized not only the Vietnam war—to which he was headed as a commissioned officer—but the policy that had spawned it, and from an historical perspective, no less. “What was an excess of isolationism,” declared the daredevil aviator and champion debater, “has become an excess of interventionism.”

In 1987, during his first term in the U.S. Senate, the Advocate interviewed Kerry about his investigation of the Iran-Contra scandal, an investigation that started with a tip from a fellow Vietnam vet who had bumped into a group of mercenaries on a visit to Central America. Leaning back and stretching his long legs as looks conveying both excitement and despondency played over his patrician face, Kerry made it clear, without putting it in so many words, that he found life as a congressman disappointing in one respect: his constituents didn’t care about his highly informed interest in foreign affairs as much as they cared about whether he could bring home the bacon.

But that was nothing compared to his disillusionment about the obstructionism he encountered in his investigations—from Democrats as well as Republicans, and from colleagues he respected as well as those from whom he expected resistance.

In his investigation of the Iran-Contra connection, and the probe of Bank of Credit and Commerce International (BCCI) that grew out of it, that obstructionism was as scandalous as the lawless slaughter, drug trafficking and money laundering he was uncovering.

Kerry and his committee had been researching the activities of Oliver North, a member of the National Security Council staff, who had set up phony businesses and clandestine bank accounts in Panama to facilitate the secret sale of arms to Iran and the channeling of money to the Contras in Nicaragua (financial aid to the Contras was then illegal under a law passed by a congressman from Springfield, U.S. Rep. Edward Boland). The FBI intimidated one of Kerry’s key witnesses and the Justice Department tried to block an investigation in Florida, but Kerry moved ahead.

Kerry Committee researchers eventually reported that “the Contra drug links included...payments to drug traffickers by the U.S. State Department of funds authorized by the Congress for humanitarian assistance to the Contras, in some cases after the traffickers had been indicted by federal law enforcement agencies on drug charges, in others while traffickers were under active investigation by these same agencies.”

Kerry’s people also learned that the CIA funneled payoffs to Panamanian strongman Manuel Noriega, who had helped North, through BCCI. The bank, it turned out, had profited hugely from drug trafficking revenues and money laundering for drug cartels, as well as profits from sales of illegal arms. But as Kerry raised more and more questions about BCCI, the Justice Department tried to thwart him by ordering key witnesses not to testify and refusing to provide documents his committee subpoenaed.

Kerry also found himself blocked by the CIA and by fellow congresspeople, some of whom had connections to BCCI. Jack Blum, an attorney Kerry hired to help with the investigation of BCCI, finally got a prosecution against the bank going in New York State, and eventually Washington had to get on board. After a long process that began in 1991, BCCI was finally shut down. Earlier, Kerry had been vindicated when the Iran-Contra affair was exposed.

That chapter in Kerry’s career made him an expert on the interconnections between global finance and global crime, and the threats those interconnections posed to the security of the U.S. and many other nations. His work was incredibly detailed; much of the fruit of it, and of his further inquiries into the international reach of Russian, Chinese and Italian organized crime and the relation of crime to terrorism, was laid out in his book The New War (1997). When Kerry ran for president in 2004, Jack Blum remarked, “There has never been a guy who has run for president who has, hands-on, known the kinds of substantive things he knows about the world of international crime, about banking and international bank regulation and finance, about the interconnectedness of the world finance system and how various intelligence agencies play into it.”

In terms of his familiarity with global issues and foreign cultures, the country has rarely had a Secretary of State who was so well qualified in advance for the post. And Kerry’s paradigms for dealing with international relations are not fossilized in Cold War frames of reference. He sees climate change, for example, as a threat to the security and stability of the international community.

It remains to be seen, however, how much President Obama will allow Kerry to develop policy as well as promote it, and how Kerry will deal with challenges, such as the current boilovers in the Middle East, that will require him to think in real time and stay ahead of the unpredictable—a different task than the retrospective investigations under relatively stable conditions that won him both antipathy and respect early in his career.•

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