The Consortium

By Robert Parry

WASHINGTON -- For John Molina's family, Fidel Castro's victory in 1959 was good news. Molina's uncle, Frank Pais, had helped Castro organize international support for his guerrilla bands in the Sierra Maestra mountains of Cuba. Pais was enshrined as a revolutionary hero after being killed by the forces of dictator Fulgencio Batista.

But Castro's embrace of communism sent young John Molina and other family members into the stream of refugees flowing to the United States. A bright and ambitious young man, John Molina moved to Atlanta, where he landed a job in the mail room of a bank. To improve his earning potential, Molina went to school nights to earn a bachelor's degree in business administration.

Molina's future, however, would soon be caught up in events unfolding to his south, in Miami. There, the CIA station had landed another kind of the job: presidential orders to remove Fidel Castro by virtually any means possible. Hundreds of exiles were signing up with a CIA-trained army that would be landed on Cuba's coast to spearhead an uprising to overthrow Castro and stop the spread of communism.

One of those exiles -- who would play a part in Molina's life story -- was Guillermo Hernandez Cartaya. Along with hundreds of other Cubans, Cartaya traveled to Central America for training in Brigade 2506, the core assault force for the invasion.

On April 14, 1961, under CIA direction, the 1,400-man brigade landed at the Bay of Pigs. Quickly, however, the Cuban army pinned down the invaders and captured 1,189 of them, including Cartaya. Months later, the U.S. government ransomed Cartaya and the others with $53 million in medicine, tractors and other equipment.

But the Bay of Pigs soldiers did not simply fade away. Many stayed with the CIA and carried the anti-communist crusade to far-flung international settings. Some fought with special counter-insurgency teams in Vietnam. Others signed up with intelligence agencies throughout South America.

By the 1970s, Cartaya was hitting it big in politics and banking, too. According to Jonathan Kwitny's Endless Enemies, Cartaya parlayed his anti-Castro credentials into powerful relationships, even joining Nelson Rockefeller on hunting and fishing trips.

Then, in the mid-1970s, Cartaya launched his most ambitious endeavor, an international financial holding company called the World Finance Corp., later renamed WFC Corp. The firm's maze of banks reached to the United Arab Emirates, Switzerland, London, the Caribbean, Miami, Colombia and Panama.

To head the crucial Panama bank, known as UniBank or Union de Bancos, Cartaya recruited another Cuban exile whom Cartaya had met during travels to Atlanta. That Cuban exile was John Molina. Taking up Cartaya on his job offer, Molina moved to Panama City to run UniBank.

With Molina at the helm, UniBank would steer Cartaya's money from all over the world into untraceable accounts. Molina also oversaw Cartaya's extensive financial dealings in Colombia and other South American countries. Millions of dollars were going in and out of major Colombian agricultural projects.

But Cartaya's banking empire encountered troubles in South Florida. Responding to a routine call, Dade County police found large quantities of marijuana residue in a Miami dumpster. Along with the marijuana residue, police found business records of corporations connected to WFC.


'It Was Drugs'

But other leads went off in surprising directions. The anti-Castro Cartaya, it seemed, had worked with a suspected Cuban government spy. Even more perplexing, WFC had received a $2 million loan from the Narodny Bank, a KGB-connected Soviet financial institution which was responsible for scrounging up hard currency for Moscow.

Police came to suspect that WFC was an intelligence front. "It was drugs, it was money-laundering, it was everything," South Florida detective James Rider told The Consortium. "I know the CIA was in there somewhere."

The investigators also came to know the name of John Molina. He was not regarded as a powerful player, though, only one of Cartaya's financial lieutenants carrying out orders. But the authorities recognized that UniBank was an important cog in Cartaya's money-laundering machine.

"All the money from Cartaya and his businesses would be funnelled down there" to Panama, said one federal prosecutor who asked not to be identified by name. "Once it got into the Union de Bancos [UniBank], it just disappeared, just poof, up in a cloud of smoke -- millions and millions of dollars just gone. It was impossible to trace any further."

In an interview with The Consortium, John Molina's brother, Pablo, confirmed UniBank's money-laundering role. Speaking from his cramped law office in Los Angeles, Pablo said John confided that UniBank "was set up as a front" for international arms smuggling and for making secret embargo-busting contacts inside Cuba.

By 1978, a joint federal-state task force had unearthed evidence of other crimes, too, particularly drug money-transfers. But both local police and federal prosecutors reported pressure from Washington and CIA headquarters in Langley to back off WFC. Too many of WFC's principals, it turned out, had cooperated with U.S. intelligence in the past. Detective Rider recalled a senior Treasury Department official assuring police investigators in the late 1970s that WFC was clean. A federal prosecutor in the case added that the CIA had intervened at the top levels of the FBI to protest the WFC probe.

Journalist Penny Lernoux investigated the WFC case for her book about financial crimes, entitled In Banks We Trust. As part of her reporting, Lernoux interviewed then-Florida State Attorney Janet Reno, who admitted that the government had bungled the case. "The bad guys really aren't very good at it," Reno said. "We're worse."

Powerful Friends

Beset with pressures and other problems, the two-year WFC investigation ended with only a minor tax case lodged against Cartaya. But Cartaya's scandal-plagued WFC empire did collapse in 1978. UniBank closed, too, costing depositors, primarily Colombians, about $18 million in losses. UniBank's president, John Molina, was out of a job and in a heap of political trouble. But Pablo Molina said Panamanian strongman, Gen. Manuel Noriega, protected John.

With other friends in the right places, John Molina was soon back on his feet financially, too. Because of his banking skills and contacts, Molina got a new job with Ron Martin who owned R&M Equipment Co. in Miami. Martin needed someone to handle banking transactions for R&M, an arms supply firm which was selling guns throughout Latin America and the Caribbean.

Pablo Molina said one of his brother's primary assignments for Martin was arranging letters of credit for the contras, a new CIA-trained army fighting the leftist government of Nicaragua. "From 1980 to April 1987, my brother worked for the CIA arranging letters of credit to purchase arms for the contras and/or other U.S.-back[ed] governments in Centr[al] and South America," Pablo wrote in later letters to authorities in Washington.

Pablo Molina claimed, too, that one important money-laundering outpost was set up at the beach resort in Benidorm, Spain -- a jai-alai fronton that handled vast sums of cash. "Benidorm was set up to launder money to help the contras," Pablo Molina said in the interview. "My impression is that it was CIA money that had to be laundered."

Pablo added that he believed Martin was directly involved because, in 1985, Pablo once overheard his brother telling Martin, "I sent the funds to Spain." But Pablo said John's chief partner in the jai-alai operation was a Cuban-American named Joe Fernandez.

In a separate interview, Martin confirmed that John Molina and Joe Fernandez did work together on the Benidorm jai-alai fronton. (The jai-alai operator, however, was not the same Joe Fernandez who served as CIA station chief in Costa Rica and who worked closely with Oliver North's operation. But Molina's activities likely would have crossed the path of the CIA's Joe Fernandez, too.)

Dangerous Games

Pablo Molina said his brother sank deeper into the Central American intrigue when he went to Costa Rica in late 1984 or early 1985. There, John Molina met Hugo Spadafora, a former Panamanian health minister who was fighting with the contras on the so-called Southern Front.

Spadafora had grown disillusioned with Eden Pastora and his contra army which Spadafora knew engaged in drug smuggling. Spadafora also planned to denounce Noriega for drug trafficking. John Molina tried to calm Spadafora down and offered Spadafora access to weapons, Pablo Molina said. John Molina added a warning that Spadafora should not to return to Panama, where Noriega had been recruited by the CIA to help the contras.

But by mid-1985, Spadafora was furious with the drug corruption. He contacted the DEA's chief officer in Costa Rica, Robert Nieves, to complain about contra drug trafficking. Nieves considered Spadafora's information too vague to pursue, but Spadafora declared that he still intended to denounce Noriega and the contras.

On Sept. 13, 1985, Spadafora boarded a bus for Panama City and, that afternoon, crossed into Panama. But at a check point, soldiers stopped the bus and dragged Spadafora off. His beheaded body was found a day later stuffed into a U.S. mail bag on the bank of a river on the Costa Rican side of the border.

The Spadafora murder touched off new suspicions about cocaine trafficking by the contras, their backers in Costa Rica and Noriega's Panamanian Defense Forces. On Dec. 20, 1985, for The Associated Press, Brian Barger and I wrote the first news story citing the growing evidence that contra units operating in northern Costa Rica had engaged in drug trafficking.

Eventually, Costa Rican authorities would agree, accusing pro-contra Cuban exiles and other Americans of using Costa Rica as a drug transshipment point. As part of these findings, Costa Rica barred the CIA's Joe Fernandez and North from the Central American nation.

(Fernandez and North have denied any role in drug trafficking, but failed to return phone calls seeking comments for this article. Now retired from the DEA, Nieves works with North and Fernandez at Guardian Technologies, a bullet-proof vest company in Sterling, Virginia. Nieves said he did not recall the name John Molina.)

Along the Honduran front, the contra-drug taint was spreading, too. Though Honduras had been a transit point for drugs since the late 1970s, the cocaine shipments swelled in the mid-1980s, implicating senior Honduran military officers who were assisting the CIA and the contras. According to a 1989 report by the Senate Foreign Relations subcommittee on narcotics, "there is evidence that individuals in the Honduran military, which controls the police, have protected the cocaine trade."

Arms & the Generals

To establish a foothold in Honduras, Ron Martin opened the Arms Supermarket in partnership with key Honduran military officers. Martin relied on Cuban-American Mario Dellamico to befriend Honduran intelligence chief, Col. Hector Aplicano. Martin also built contacts inside the contras with top leaders, including Adolfo Calero and Enrique Bermudez.

When Congress cut off direct CIA support for the contras in 1984, the Arms Supermarket stepped forward as a leading source for continued contra military aid. In this operation, Martin explained that John Molina was the banker, well-connected Panamanian Enrique DelValle supplied the money contacts, and Dellamico handled matters on the ground in Honduras.

"All the money ... came from Panamanian bankers who fronted the money with letters of credit" arranged by Molina, Martin told Iran-contra investigators. Martin said his operation succeeded in shipping about $1 million in weapons to the contras via the Honduran military. But millions of dollars more in weapons piled up at the warehouse in San Pedro Sula, Honduras.

Rumors soon spread that the Arms Supermarket's money came from recycled drug profits. Martin, however, blamed those drug rumors on North's associates who wanted to corner the contra market. In a recent interview, Martin insisted again that the Supermarket had no drug ties. But he refused to specify where the millions of dollars originated.

"It came from other sources," Martin stated cryptically. Then, presumably referring to U.S. government officials, he added, "we explained it to them in detail, where everything came from."

Despite his broad denials, Martin did not rule out the possibility that John Molina was trafficking in drugs to support his own expensive life-style. "There was always the question of where John was getting his cash," Martin said. "We don't know where he was getting these wads of cash. ...John was living it up beyond his means."

For his part, Pablo Molina defends his brother against the drug suspicions. But Pablo remembered that John had his own concerns about the Arms Supermarket's money. "I'm not surprised that there is drug money involved in this," Pablo Molina told The Consortium. "John would say, 'There's too much money coming in. It's more than I can conceive is being brought in by the CIA. ...You can't imagine how much money is involved. Even Martin doesn't know how much is involved'."

In April 1987, John Molina began pulling out of Martin's weapons business and turning more attention to the Panamanian political scene. John Molina allied himself with Noriega's enemies and thus was a prime target for Noriega's henchmen, both because of Molina's CIA connections and his ability to secure arms. Exposed publicly as a drug trafficker and no longer useful to the contras, Noriega had lost his backing from Washington.

Through the summer of 1987, John Molina worked on plans to start his own business, Pablo Molina said. But John still had work to tidy up some loose ends for Martin, principally untangling the complex threads of corporate front companies handled by the Panamanian law firm, Sucre y Sucre.

On Oct. 1, 1987, Pablo Molina remembered that an earthquake had rattled southern California, and his brother called on his car's cellular phone from Miami to check on Pablo's safety. A Panamanian military officer was with John as they drove to the airport. John's presence suddenly was needed back in Panama City.

The next day, John Molina accompanied Enrique DelValle, a relative of Panama's president Eric DelValle, to the law offices of Sucre y Sucre in Panama City. By afternoon, Molina and DelValle had completed their contra-related business. They left the airy low-rise building together and walked toward Molina's red four-wheel-drive Mitsubishi.

As the two men climbed in, a Colombian gunman stepped up to the car and fired three shots into John Molina's head. Quickly captured, the gunman claimed he shot Molina in retaliation for an unpaid drug debt. The banker, who knew many of the secrets about the contras and cocaine, was dead.

(c) Copyright 1997

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