the pricey white powder into powerful little nuggets that
 could be smoked -- crack.

 Crack turned the cocaine world on its head. Cocaine
 smokers got an explosive high unmatched by 10 times as
 much snorted powder. And since only a tiny amount was
 needed for that rush, cocaine no longer had to be sold in
 large, expensive quantities. Anyone with $20 could get
 wasted.

 It was a ''substance that is tailor-made to addict           
 people,'' Dr. Robert Byck, a Yale University cocaine            
 expert, said during congressional testimony in 1986. ''It       
 is as though (McDonald's founder) Ray Kroc had invented          
 the opium den.''                                               
                                                                
 Crack's Kroc was a disillusioned 19-year-old named Ricky        
 Donnell Ross, who, at the dawn of the 1980s, found himself      
 adrift on the streets of South-Central Los Angeles.

 A talented tennis player for Dorsey High School, Ross had
 recently seen his dream of a college scholarship evaporate
 when his coach discovered he could neither read nor write.

 At the end of tennis season, Ross quit high school and
 wound up at Los Angeles Trade-Technical College, a
 vocational community college where, ironically, he learned
 to bind books. But a bookbinding career was the last thing
 Ross had in mind. L.A. Trade-Tech had a tennis team, and
 Ross was still hoping his skills with the racquet would
 get his dreams back on track.

 ''He was a very good player,'' recalled Pete Brown, his
 former coach at L.A. Trade-Tech. ''I'd say he was probably
 my No. 3 guy on the team at the time.''

 To pay his bills, however, Ross picked up a different
 racket: stolen car parts. In late 1979, he was arrested
 for stealing a car and had to quit the trade while the
 charges were pending.

 'Freeway Rick' hears about popularity of jet-set drug

 During this forced hiatus, Ross said, a friend home on
 Christmas break from San Jose State University told him
 about the soaring popularity of a jet-set drug called
 cocaine, which Ross had only vaguely heard about. In the
 impoverished neighborhoods of South-Central, it was
 virtually non-existent. Most street cops, in fact, had
 never seen any because cocaine was then a parlor drug of
 the wealthy and the trendy.

 Ross' friend -- a college football player -- told him
 ''cocaine was going to be the new thing, that everybody
 was doing it.'' Intrigued, Ross set off to find out more.

 Through a cocaine-using auto upholstery teacher Ross knew,
 he met a Nicaraguan named Henry Corrales, who began
 selling Ross and his best friend, Ollie ''Big Loc''
 Newell, small amounts of remarkably inexpensive cocaine.

 Thanks to a network of friends in South-Central and
 Compton, including many members of various Crips gangs,
 Ross and Newell steadily built up clientele. With each
 sale, Ross reinvested his hefty profits in more cocaine.

 Eventually, Corrales introduced Ross and Newell to his
 supplier, Danilo Blandon. And then business really picked
 up.

 ''At first, we was just going to do it until we made
 $5,000,'' Ross said. ''We made that so fast we said, no,
 we'll quit when we make $20,000. Then we was going to quit
 when we saved enough to buy a house ...''

 Ross would eventually own millions of dollars' worth of
 real estate across Southern California, including houses,
 motels, a theater and several other businesses. (His
 nickname, ''Freeway Rick,'' came from the fact that he
 owned properties near the Harbor Freeway in Los Angeles.)

 Within a year, Ross' drug operation grew to dominate
 inner-city Los Angeles, and many of the biggest dealers in
 town were his customers. When crack hit L.A.'s streets
 hard in late 1983, Ross already had the infrastructure in
 place to corner a huge chunk of the burgeoning market.

 $2 million worth of crack moved in a single day

 It was not uncommon, he said, to move $2 million or $3
 million worth of crack in one day.

 ''Our biggest problem had got to be counting the money,''
 Ross said. ''We got to the point where it was like, man,
 we don't want to count no more money.''

 Nicaraguan cocaine dealer Jacinto Torres, another former     
 supplier of Ross and a sometime- partner of Blandon, told       
 drug agents in a 1992 interview that after a slow start,          
 ''Blandon's cocaine business dramatically increased. ...       
 Norwin Meneses, Blandon's supplier as of 1983 and 1984,        
 routinely flew quantities of 200 to 400 kilograms from         
 Miami to the West Coast.''

 Leroy ''Chico'' Brown, an ex-crack dealer from Compton who
 dealt with Ross, told the Mercury News of visiting one of
 Ross' five cookhouses, where Blandon's powder was turned
 into crack, and finding huge steel vats of cocaine
 bubbling atop restaurant-size gas ranges.

 ''They were stirring these big pots with those things you
 use in canoes,'' Brown said with amazement. ''You know --
 oars.''

 Blandon told the DEA last year that he was selling Ross up   
 to 100 kilos of cocaine a week, which was then ''rocked         
 up'' and distributed ''to the major gangs in the area,            
 specifically the "Crips' and the "Bloods,''' the DEA         
 report said.

 At wholesale prices, that's roughly $65 million to $130
 million worth of cocaine every year, depending on the
 going price of a kilo.

 "He was one of the main distributors down here," said
 former Los Angeles Police Department narcotics detective
 Steve Polak, who was part of the Freeway Rick Task Force,
 which was set up in 1987 to put Ross out of business. "And
 his poison, there's no telling how many tens of thousands
 of people he touched. He's responsible for a major cancer
 that still hasn't stopped spreading."

 But Ross is the first to admit that being in the right
 place at the right time had almost nothing to do with his
 amazing success. Other L.A. dealers, he noted, were
 selling crack long before he started.

 What he had, and they didn't, was Danilo Blandon, a friend   
 with a seemingly inexhaustible supply of high-grade
 cocaine and an expert's knowledge of how to market it.
                                                                
 ''I'm not saying I wouldn't have been a dope dealer            
 without Danilo,'' Ross stressed. ''But I wouldn't have          
 been Freeway Rick.''                                           
 The secret to his success, Ross said, was Blandon's         
 cocaine prices. ''It was unreal. We were just wiping out          
 everybody.''                                                 

 That alone, Ross said, allowed him to sew up the Los
 Angeles market and move on. In city after city, local
 dealers either bought from Ross or got left behind.

 ''It didn't make no difference to Rick what anyone else
 was selling it for. Rick would just go in and undercut him
 $10,000 a key,'' Chico Brown said. ''Say some dude was
 selling for 30. Boom -- Rick would go in and sell it for
 20. If he was selling for 20, Rick would sell for 10.
 Sometimes, he be giving (it) away.''

 Before long, Blandon was giving Ross hundreds of kilos of
 cocaine on consignment -- sell now, pay later -- a
 strategy that dramatically accelerated the expansion of
 Ross' crack empire, even beyond California's borders.

 Ross said he never discovered how Blandon was able to get
 cocaine so cheaply. ''I just figured he knew the people,
 you know what I'm saying? He was plugged.''

 But Freeway Rick had no idea just how ''plugged'' his
 erudite cocaine broker was. He didn't know about Norwin
 Meneses, or the CIA, or the Salvadoran air force planes
 that allegedly were flying the cocaine into an air base in
 Texas.

 And he wouldn't find out about it for another 10 years.

 TUESDAY: The impact of the crack epidemic on the black
 community, and why justice hasn't been for all.

 -----------------------------------------------------------
 Additional reporting for this series in Nicaragua and
 Costa Rica was done by Managua journalist Georg Hodel.
 Research assistance at the Nicaraguan Supreme Court was
 performed by journalist Leonore Delgado.

DAY 3

 War on drugs has unequal impact on black Americans

 Contra case illustrates the discrepancy: Nicaraguan goes free; L.A.
 dealer faces life

 Published: Aug. 20, 1996                                     
 BY GARY WEBB                                                 
 Mercury News Staff Writer                                    
                                                             
 FOR THE LAST YEAR and a half, the U.S. Department of          
 Justice has been trying to explain why nearly everyone       
 convicted in California's federal courts of ''crack''        
 cocaine trafficking is black.                                
                                                              
 Critics, who include some federal court judges, say it        
 looks like the Justice Department is targeting crack         
 dealers by race, which would be a violation of the U.S.      
 Constitution.                                             
 Federal prosecutors, however, say there's a simple, if
 unpleasant, reason for the lopsided statistics: Most crack   
 dealers are black.                                         
 ''Socio-economic factors led certain ethnic and racial        
 groups to be particularly involved with the distribution      
 of certain drugs,'' the Justice Department argued in a       
 case in Los Angeles last year, ''and blacks were             
 particularly involved in the Los Angeles area crack        
 trade.''                                                    

 But why -- of all the ethnic and racial groups in
 California to pick from -- crack planted its deadly roots
 in L.A.'s black neighborhoods is something only Oscar
 Danilo Blandon Reyes can say for sure.

 Danilo Blandon, a yearlong Mercury News investigation
 found, is the Johnny Appleseed of crack in California --
 the Crips' and Bloods' first direct-connect to the cocaine
 cartels of Colombia. The tons of cut-rate cocaine he
 brought into black L.A. during the 1980s and early 1990s
 became millions of rocks of crack, which spawned new crack
 markets wherever they landed.

 On a tape made by the Drug Enforcement Administration in
 July 1990, Blandon casually explained the flood of cocaine
 that coursed through the streets of South-Central Los
 Angeles during the previous decade.

 ''These people have been working with me 10 years,''
 Blandon said. ''I've sold them about 2,000 or 4,000
 (kilos). I don't know. I don't remember how many.''
                                                                   
 ''It ain't that Japanese guy you were talking about, is       
 it?'' asked DEA informant John Arman, who was wearing a        
 hidden transmitter.                                             
                                                                
 ''No, it's not him,'' Blandon insisted. ''These ... these       
 are the black people.''                                      
 Arman gasped. ''Black?!''                                    

 ''Yeah,'' Blandon said. ''They control L.A. The people            
 (black cocaine dealers) that control L.A.''
                                                               
 U.S. has paid Blandon more than $166,000
                                                                 
 But unlike the thousands of young blacks now serving long      
 federal prison sentences for selling mere handfuls of the      
 drug, Blandon is a free man today. He has a spacious new        
 home in Nicaragua and a business exporting precious woods,    
 courtesy of the U.S. government, which has paid him more        
 than $166,000 over the past 18 months, records show -- for       
 his help in the war on drugs.                                   
 That turn of events both amuses and angers ''Freeway
 Rick'' Ross, L.A.'s premier crack wholesaler during much          
 of the 1980s and Danilo Blandon's biggest customer.           
                                                                   
 ''They say I sold dope everywhere but, man, I know he done
 sold 10 times more dope than me,'' Ross said with a laugh     
 during a recent interview.
                                                              
 Nothing epitomizes the drug war's uneven impact on black
 Americans more clearly than the intertwined lives of Ricky
 Donnell Ross, a high school dropout, and his suave cocaine
 supplier, Danilo Blandon, who has a master's degree in
 marketing and was one of the top civilian leaders in
 California of an anti-communist guerrilla army formed by
 the U.S. Central Intelligence Agency. Called the Fuerza
 Democratica Nicaraguense (FDN), it became known to most
 Americans as the Contras.

 In recent court testimony, Blandon, who began dealing         
 cocaine in South-Central L.A. in 1982, swore that the
 first kilo of cocaine he sold in California was to raise
 money for the CIA's army, which was trying on a shoestring     
 to unseat Nicaragua's new socialist Sandinista government.      
                                                                
 After Blandon crossed paths with Ross, a South-Central           
 teen-ager who had the gang connections and street smarts      
 necessary to move the army's cocaine, a veritable blizzard      
 engulfed the ghettos.                                  
 Former Los Angeles Police narcotics detective Stephen W.      
 Polak said he was working the streets of South-Central in         
 the mid-1980s when he and his partners began seeing more     
 cocaine than ever before.

 ''A lot of detectives, a lot of cops, were saying, hey,
 these blacks, no longer are we just seeing gram dealers.
 These guys are doing ounces; they were doing keys,'' Polak
 recalled. But he said the reports were pooh-poohed by
 higher-ups who couldn't believe black neighborhoods could
 afford the amount of cocaine the street cops claimed to be
 seeing.

 ''Major Violators (the LAPD's elite anti-drug unit) was
 saying, basically, ahh, South-Central, how much could they
 be dealing?'' said Polak, a 21-year LAPD veteran. ''Well,
 they (black dealers) went virtually untouched for a long
 time.''

 It wasn't until January 1987 -- when crack markets were
 popping up in major cities all over the U.S. -- that law
 enforcement brass decided to confront L.A.'s crack problem
 head-on. They formed the Freeway Rick Task Force, a cadre
 of veteran drug agents whose sole mission was to put Rick
 Ross out of business. Polak was a charter member.

 ''We just dedicated seven days a week to him. We were just
 on him at every move,'' Polak said.

 Ross, as usual, was quick to spot a trend. He moved to
 Cincinnati and quietly settled into a home in the woodsy
 Republican suburbs on the east side of town.

 ''I called it cooling out, trying to back away from the
 game,'' Ross said. ''I had enough money.''

 His longtime supplier, Blandon, reached an identical
 conclusion around the same time. A massive police raid on
 his cocaine operation in late 1986 nearly gave his wife a
 nervous breakdown, he testified recently, and by the
 summer of 1987 he was safely ensconced in Miami, with $1.6
 million in cash.

 Some of his drug profits, records show, were invested in a
 string of rental car and export businesses in Miami, often
 in partnership with an exiled Nicaraguan judge named Jose
 Macario Estrada. Like Blandon, the judge also worked for
 the CIA's army, helping FDN soldiers and their families
 obtain visas and work papers in the United States. Estrada
 said he knew nothing of Blandon's drug dealings at the
 time.

 Blandon invested in four-star steak house

 Blandon also bought into a swank steak-and-lobster          
 restaurant called La Parrilla, which became a popular         
 hangout for FDN leaders and supporters. The Miami Herald       
 called it the ''best Nicaraguan restaurant in Dade
 County'' and gave it a four-star rating, its highest.

 But neither Ross nor Blandon stayed ''retired'' for long.

 A manic deal-maker, Ross found Cincinnati's virgin crack
 market too seductive to ignore. When he left Los Angeles,
 the price of a kilo was around $12,000. In the Queen City,
 Ross chuckled, ''keys was selling for $50,000. It was like
 when I first started.''

 Plunging back in, the crack tycoon cornered the Cincinnati
 market using the same low-price, high-volume strategy --
 and the same Nicaraguan drug connections -- he'd used in
 L.A. Soon, he was selling crack as far away as Cleveland,
 Indianapolis, Dayton and St. Louis.

 ''There's no doubt in my mind crack in Cincinnati can be
 traced to Ross,'' police officer Robert Enoch told a
 Cincinnati newspaper three years ago.

 But Ross' reign in the Midwest was short-lived. In 1988,
 one of his loads ran into a drug-sniffing dog at a New
 Mexico bus station and drug agents eventually connected it
 to Ross. He pleaded guilty to crack trafficking charges
 and received a mandatory 10-year prison sentence, which he
 began serving in 1990.

 In sunny Miami, Blandon's retirement plans also had gone
 awry. His 24-city rental car business collapsed in 1989
 and later went into bankruptcy. To make money, he
 testified, he came to the Bay Area and began brokering
 cocaine again, buying and selling from the same Nicaraguan
 dealers he'd known from his days with the FDN. In 1990 and
 1991, he testified, he sold about 425 kilos of cocaine in
 Northern California -- $10.5 million worth at wholesale
 prices.

 But unlike before, when he was selling cocaine for the
 Contras, Blandon was constantly dogged by the police.

 Twice in six months he was detained, first by Customs
 agents while taking $117,000 in money orders to Tijuana to
 pay a supplier, and then by the LAPD in the act of paying
 one of his Colombian suppliers more than $350,000.

 The second time, after police found $14,000 in cash and a
 small quantity of cocaine in his pocket, he was arrested.
 But the U.S. Justice Department -- saying a prosecution
 would disrupt an active investigation -- persuaded the
 cops to drop their money laundering case.

 Soon after that, Blandon and his wife, Chepita, were
 called down to the U.S. Immigration and Naturalization
 Service office in San Diego on a pretense and scooped up
 by DEA agents, on charges of conspiracy to distribute
 cocaine. They were jailed without bond as dangers to the
 community and several other Nicaraguans were also
 arrested.

 Blandon's prosecutor, L.J. O'Neale, told a federal judge
 that Blandon had sold so much cocaine in the United States
 his mandatory prison sentence was ''off the scale.''

 Then Blandon ''just vanished,'' said Juanita Brooks, a San
 Diego attorney who represented one of Blandon's
 co-defendants. ''All of a sudden his wife was out of jail
 and he was out of the case.''

 The reasons were contained in a secret Justice Department    
 memorandum filed in San Diego federal court in late 1993.      
 Prosecutor found Blandon 'extraordinarily valuable'            
 Blandon, prosecutor O'Neale wrote, had become                  
 ''extraordinarily valuable in major DEA investigations of     
 Class I drug traffickers.'' And even though probation
 officers were recommending a life sentence and a $4
 million fine, O'Neale said the government would be
 satisfied if Blandon got 48 months and no fine. Motion
 granted.

 Less than a year later, records show, O'Neale was back       
 with another idea: Why not just let Blandon go? After all,    
 he wrote the judge, Blandon had a federal job waiting.        
 O'Neale, saying that Blandon ''has almost unlimited          
 potential to assist the United States,'' said the               
 government wanted ''to enlist Mr. Blandon as a full-time,
 paid informant after his release from prison.''

 And since it would be hard to do that job with parole
 officers snooping around, O'Neale added, the government
 wanted him turned loose without any supervision. Motion
 granted. O'Neale declined to comment.

 After only 28 months in custody, most of it spent with
 federal agents who debriefed him for ''hundreds of
 hours,'' he said, Blandon walked out of the Metropolitan
 Correctional Center in San Diego, was given a green card
 and began working on his first assignment: setting up his
 old friend ''Freeway Rick'' for a sting operation.

 Targeted for a sting while sitting in prison                
 Records show Ross was still behind bars, awaiting parole,      
 when San Diego DEA agents targeted him for a ''reverse''       
 sting -- one in which government agents provide the drugs       
 and the target provides the cash. The sting's author, DEA       
 agent Chuck Jones, has testified that he had no evidence        
 Ross was dealing drugs from his prison cell, where he'd
 spent the past four years.                                 
 But during his incarceration Ross did something that, in       
 the end, may have been even more foolhardy: He testified      
 against Los Angeles police officers, as a witness for the     
 U.S. government.

 Soon after Ross went to prison for the Cincinnati bust,
 federal prosecutors from Los Angeles came to see him,
 dangling a tantalizing offer. A massive scandal was
 sweeping the L.A. County sheriff's elite narcotics squads,
 and among the dozens of detectives fired or indicted for
 allegedly beating suspects, stealing drug money and
 planting evidence were members of the old Freeway Rick
 Task Force.

 If Ross would testify about his experiences, he was told,
 it could help him get out of jail.

 In 1991, he took the stand against his old nemesis, LAPD
 detective Steve Polak, who eventually pleaded guilty to a
 misdemeanor charge of excessive use of force and retired.
 But the deal Ross got from federal prosecutors for
 testifying -- five years off his sentence and an agreement
 that his remaining drug profits would not be seized --
 galled many.

 ''Ross will fall again someday,'' Polak bitterly told a
 Los Angeles Times reporter in late 1994.

 By then, the trip wires were already strung.

 Within days of Ross' parole in October 1994, he and
 Blandon were back in touch and their conversation quickly
 turned to cocaine. It was almost like old times, except
 that Ross was now hauling trash for a living. He was also
 behind on his mortgage payments for an old theater he
 owned in South-Central, which he was trying to turn into a
 youth academy.

 According to tapes Blandon made of some of their             
 discussions, Ross repeatedly told Blandon that he was         
 broke and couldn't afford to finance a drug deal. But Ross      
 did agree to help his old mentor, who was also pleading       
 poverty, find someone else to buy the 100 kilos of cocaine
 Blandon claimed he had.

 Drug-laden vehicle was a trap for Ross

 On March 2, 1995, in a shopping center parking lot in
 National City, near San Diego, Ross poked his head inside
 a cocaine-laden Chevy Blazer and the place exploded with
 police.

 Ross jumped into a friend's pickup and zoomed off             
 ''looking for a wall that I could crash myself into,'' he     
 said. ''I just wanted to die.'' He was captured after the      
 truck careened into a hedgerow and has been held in jail      
 without bond since then.                                      
 Ross' arrest netted Blandon $45,500 in government rewards
 and expenses, records show. On the strength of Blandon's
 testimony, Ross and two other men were convicted of
 cocaine conspiracy charges in San Diego last March --
 conspiring to sell the DEA's cocaine. Sentencing is set
 for Aug. 23. Ross is facing a life sentence without the
 possibility of parole. The other men are looking at 10- to
 20- year sentences.

 Acquaintances say Blandon, who refused repeated interview
 requests, is a common sight these days in Managua's better
 restaurants, drinking with friends and telling of his
 ''escape'' from U.S. authorities.

 According to his Miami lawyer, Blandon spends most of his
 time shuttling between San Diego and Managua, trying to
 recover Nicaraguan properties he left behind in 1979, when
 the socialists seized power and sent him running to the
 United States.

 -----------------------------------------------------------
 Additional reporting for this series in Nicaragua and
 Costa Rica was done by Managua journalist Georg Hodel.
 Research assistance at the Nicaraguan Supreme Court was
 performed by journalist Leonore Delgado.

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