The next day a T-28 aircraft ineffectually bombed the oil storage tanks at the major port of Corinto. About a dozen T-28 planes were in the Honduran air force. On October 3 an FDN supply flight was shot down by Sandinistas over northern Nicaragua. One man among that crew died, but two were taken prisoner; both had been National Guardsmen.

  Nicaragua operations were indirectly responsible for other American deaths in Honduras. Army warrant officer Jeffrey Schwab died on January 11, 1984, when the helicopter he piloted toward Aguacate went off course into Nicaragua and was shot up by Sandinista soldiers. The following month, maneuvers led to the death of four Americans, with six others injured, including Green Berets. Two navy SEALs perished in a maneuver accident in December 1984. Six American and eight foreign journalists should be added to the military deaths. Casualties inside Nicaragua to 1984 totaled more than twelve thousand while contra losses are unknown.

  Even more than Afghanistan, Nicaragua became Bill Casey’s war. Where Reagan set the policy, the DCI executed it. But for Nicaragua, Casey went to Reagan, pushing him, encouraging his worst fears. Supervising Clarridge’s planning, Casey overrode DO objections. In the field he oversaw arrangements of the case officers under Clarridge. The CIA director visited Tegucigalpa in the early summer of 1982 when the machinery was just moving into gear. At the height of controversy over human rights violations, in the summer of 1983, Director Casey again appeared in Honduras, and the guerrilla manual followed.

  In his determined pursuit of Nicaragua covert actions, Casey ran afoul of Congress in a way unprecedented for a director of central intelligence. Having assured legislators that he would be open to the intelligence committees, Casey progressively terminated various kinds of reporting that had been routine. His disdain for oversight, no doubt reinforced by his painful confirmation, became well known at Langley. Dewey Clarridge added to Casey’s concern, describing the way Senator Moynihan pushed at him when the CIA man went up to the Hill. Director Casey resolved to bring in a new broom to deal with Congress, for which he summoned Clair George, the associate deputy director for operations.

  The House select committee had become especially suspicious. Still dominated by Democrats after the 1980 election, the House committee initiated the Boland Amendment in 1982 and 1983. This restriction passed into law as a secret clause of the fiscal 1983 appropriation. After one of these votes in July 1983, Reagan officials boldly answered that they had no intention of reducing aid to the rebels. Twice the House voted to terminate the contra program, saved only because friendly senators restored the CIA money when spending bills went to House-Senate conference committees.

  By 1983, especially after the fiasco of the Leahy visit, it had become abundantly clear at Langley that the existing presidential finding needed amendment. The Senate intelligence committee told the CIA that May that the finding lacked specifics on what the project encompassed, the grounds for this action, and the objectives sought. The tension between the limited goal of arms interdiction and the much more extensive actual CIA activity invited probing. The act of drafting a new finding, with the briefings and solicitations of congressional opinion it required, might give Congress some sense of involvement. But at the same time Congress was promised a fresh finding to delimit the war more precisely, the CIA busily planned fresh escalation—mining ships in Nicaraguan harbors.

  In May 1983 Washington informed Ambassador Negroponte of the quest for a new finding. On August 3 Director Casey appeared before the Senate committee to outline a draft. A week later he sent the reworked paper to national security adviser Clark and Secretary of State Shultz. For weeks the secret war managers refined the document. Clarridge showed it to Negroponte on September 12. The ambassador thought it too narrow, still focused almost exclusively on interdiction. Casey explained why—he wanted nothing that might jeopardize continued funding. Negroponte objected that a more comprehensive finding might actually attract broader support. This exchange illustrates how disjointed the war wizards had become.

  The NSC discussed the orders on September 16; President Reagan approved several days later. The finding provided for U.S. support for paramilitary operations against Nicaragua. It broadened the project to include both arms and inducing “the Sandinistas and Cubans and their allies” to cease backing insurgents in the region. Nicaragua was to be robbed of the resources necessary to furnish such aid. The project was supposed to force Managua into genuine negotiations.

  In the short term the CIA got what it wanted—Congress did not strengthen the Boland Amendment, though it kept spending on the Nicaragua war to the $24 million already appropriated, and warned that no more would be coming until the next fiscal year. But the fresh authority contained problems of its own. Economic warfare that impoverished Nicaragua could be seen as going much further than preventing Managua’s help to revolution elsewhere. Several elements of the finding or the attached explanatory paper reveal a commitment to open-ended war. By including Cubans among the specified goals, authority had in fact been extended regardless of anything Managua might do. That negotiations were to be genuine and agreements verifiable set the stage for war despite peace talks. The Reagan administration also made itself the sole arbiter of the fulfillment of these conditions. Did the aim of promoting democracy include targeting the public support enjoyed by the Sandinista government? Text that remains excised from declassified versions of this finding leaves it unclear whether it permitted unilateral CIA operations, as were about to occur, or confined the agency to supporting others. Meanwhile the “others” had the explicit goal of overthrowing the Sandinistas, no matter what Reagan’s finding might say, and the administration knew that very well.

  For the longer term the September 1983 finding challenged congressional overseers of intelligence to decide they had been fooled. Already wary of a broad-tracked finding, Casey attempted to assuage Congress with his explanatory paper. But, anticipating what soon happened, he warned that the $24 million budget would run out and that he expected to need another $14 million to get through the fiscal year. In explaining the finding to the Senate intelligence committee on September 20, Casey set one booby trap himself, saying: “The new finding . . . no longer expressly authorizes us to conduct paramilitary operations—but rather to provide support to Nicaraguan paramilitary resistance groups . . . we have less of a leadership role and more of a passive role.”

  The booby-trapped finding coupled with Casey’s disastrous choice of congressional liaison produced a metastable solution. Clair George, of the DO fraternity since the Korean War, believed passionately in secrecy. George promised openness and made a show of it, inaugurating weekly lunches with the staff directors of the Senate and House committees. Robert Simmons at first thought the lunches a splendid device. But Simmons had been a direct witness to the burning of Patrick Leahy a few months earlier, and before long he saw himself being played too. Rob Simmons decided that George’s idea of liaison amounted to the standard procedure of a clandestine service officer in a hostile country, with Congress the country and the CIA officer saying only what seemed politically necessary or strategically desirable. The flow of information, far from broadening, slowed to a trickle.

  After two years of active warfare the contras could show no lasting success. A CIA timetable that envisioned “liberated zones” before the end of 1983 had gone badly awry, with the FDN failing to capture and hold towns. Casey did his best to gloss the facts, telling Congress that the Sandinistas might be overthrown in a year—skirting the edge of discourse that was legal under the Boland Amendment, a pitfall he escaped by insisting he had been misquoted. Casey’s claim itself would also be discredited both by the American general commanding in Central America and by a leak that no intelligence estimates agreed with this assertion. Frustration led Casey to advocate the interdiction of Nicaragua’s foreign trade by attacks on and the mining of its ports, an operation that took the secret war to a whole new level.

  As Dewey Clarridge presents these events, Director Casey and he were equally concerned with the need to hit the Sandinistas harder. He quotes Casey: “Can’t we get more pressure on these people?” But the resulting plan the agency’s Latin baron describes was one to interdict seaborne arms shipments into El Salvador using gunboats—a measure that did not strike Nicaragua. Conversely, once Clarridge had the boats they never went after the arms trade, only attacking Nicaragua. And Clarridge muddies the water by claiming that CIA actions purporting to be against the arms traffic could force Managua to negotiate. This disingenuousness, even in retrospect, is necessary to maintain the appearance that CIA acted within the scope of the 1983 finding. Clarridge called his warships “Q-boats” after the disguised armed merchant cruisers used in both world wars. But they were not disguised at all. Others called them “Piranhas” after the predatory fish native to South America.

  The Q-boats were manufactured in North Miami Beach by Cigarette Boats Racing, Inc.—two craft, thirty to forty feet long with Kevlar hulls and dual inboard motors, carrying grenade launchers and automatic cannon. The boats were large enough to carry, and lay, mines. They were capable of incredible speed—sixty-five knots. Sailors trained to use them on Roatan Island, off the northern Honduran coast. Bill Shepherd, a navy SEAL assigned to the DO, designed the configuration and monitored conversion. After all the work, there are no reports of Q-boats attacking vessels that were smuggling arms across the Gulf of Fonseca that separates Nicaragua from El Salvador. The U.S. Southern Command ran an operation to infiltrate the traffic, using Boston whalers on the Gulf of Fonseca led by a Delta Force operator. Southern Command discovered that much of the smuggling actually utilized boats belonging to Salvadorans. Clarridge records a contra commando raid on one of the coastal staging areas used for the traffic.

  A second ploy was an air attack on a radio post the Nicaraguans used to intercept Salvadoran military messages to help the guerrillas and, some contend, relay their own traffic. Contra air commander Juan Gomez carried out the attack with a couple of planes flying out of the Salvadoran airbase at Ilopango.

  Instead Langley’s project quickly morphed away from interdiction—even before the September finding—into an effort to make the Nicaraguan economy scream. Secretary of State George Shultz recounts what happened. Shultz saw the NSC staff, not Casey, as trying to control Nicaragua policy, and believed if the United States lost the secret war it would be due to them. In late May 1983 he went to President Reagan, who agreed that Shultz should have the leading role on Central America. Then on May 28 Shultz received a cable informing him that the Crisis Pre-Planning Group had decided to mine a river on Nicaragua’s eastern coast and have divers place limpet mines on ships in port. Shultz was dumbfounded.

  Secret warriors’ frustration had its mirror at the highest levels. Talk at the 208 Committee and the National Security Planning Group focused on how to break out of the cycle of military failure. On May 31 the NSPG reviewed the mine project. Shultz argued against the plan and insisted the CPPG had no decision authority, showing the directive that had created it. The CIA came in with a poor presentation, and Reagan rejected the project.

  Like much that happened on Reagan’s watch, the decision did not stick. Policy activists always thought they could go around the bureaucracy—and frequently succeeded. What Fred Iklé and Elie Krakowski had done on Afghanistan, Casey and Clarridge now did on Nicaragua. Early in July Casey went to Central America. With him he took Clarridge; DDCI John McMahon; the national intelligence officer for Latin America, John Horton; and another of the barons, International Activities Division chief Robert Magee. McMahon, representative of career professionals at CIA, wary about covert operations from Church Committee days, had learned to work in tandem with Congress, which opposed extravagant initiatives on Nicaragua. Bringing McMahon created an appearance of unity. Bob Magee returned to recruit Cuban exiles and other Latin Americans, whom the CIA would call “Unilaterally Controlled Latino Assets,” or UCLAs. Soon afterward both contras and UCLAs began learning how to use limpet mines at Roatan island.

  Casey then took a page from the Mongoose playbook—the CIA outfitted a mother ship. In the summer of 1983 Langley leased a vessel built to sustain offshore oil-rigs. The ship had a long, flat cargo deck sufficient for several helicopters. A pair of Q-boats could be launched or shipped by hydraulic ramps the agency installed. Given the time required for construction and the moment the mother ship went into action, acquisition of the ship and design and installation of its equipment had to have begun around the time of the NSPG meeting where Reagan rejected the CIA plan.

  Edgar Chamorro records that Dewey Clarridge came to Honduras in July and told the contra high command that the CIA had decided to cut off Nicaragua’s oil supplies—clearly unrelated to interdicting arms to El Salvador—and spoke of a plan “to sink ships” bearing oil for Nicaragua. The baron detailed several alternatives. Clarridge himself recounts going to the Restricted Interagency Group to advocate that the United States begin attacking selected economic targets. According to Clarridge, there were no objections, including from Secretary Shultz’s representative, the RIG chairman. “Given the limited activity anticipated,” Clarridge writes, “no one thought the decision needed ratification at an NSPG meeting.” To recap, the CIA division chief, aware that the president had recently rejected the mining plan, here proposed a major escalation to directly attack the Nicaraguan economy and thought no approval from higher authority necessary. Moreover the CIA’s Directorate of Intelligence also had no opportunity to comment on the potential of this plan, which angered Robert Gates as well.

  Clarridge was correct in the sense that bringing Reagan on board would merely take time. At a briefing during the summer the president himself asked what could be done to hamper Nicaragua’s oil. Suddenly the door opened wide. Bill Casey stood ready to recommend that the CIA attack Nicaraguan ports and ships carrying oil and other commodities. Not even a Shultz resignation threat could stop the project.

  In the discussions at the White House, Bill Casey, “Cap” Weinberger, and George Shultz all recognized that Managua depended on imports, especially Soviet weapons and foreign oil. American military exercises in Central America had already featured naval task forces off the Nicaraguan coast; now NSPG members, harking back to Kennedy in the Cuban Missile Crisis, began talking of a blockade. That involved open use of force, however—an act of war. An administration having so much trouble just getting CIA funds approved in Congress had no chance of obtaining a declaration of war. Over at least two NSPG meetings, Robert McFarlane recalls, they settled on mining Nicaraguan harbors rather than involving U.S. forces.

  McFarlane says that Casey suggested the mining. Some preparatory work took place between the meetings, but the analysis, drawn narrowly, did not rise to the level of a real risk-cost study. The obvious rejoinder to mining—what would happen if mines sank a Russian ship?—surfaced at NSPG. The secret-war wizards resolved to produce mines not capable of sinking large ships. Of course this robbed the mining of its military rationale, and it affected legality as well, since international law permits only “effective” blockade. Ronald Reagan approved anyway. McFarlane concedes that the scheme was “not one of the happiest episodes” of Reagan’s administration.

  In the fall of 1983 Casey implemented the plan. The CIA itself carried out the attacks and mining of the ports. The mother ship acted as command post and carried raiding parties to distant targets. It also had armed helicopters to support raids. Commando parties consisted mostly of Latins and CIA contract agents for underwater demolition and specialized tasks. Contract employees piloted the helicopters while agency officers had complete command. On October 10, 1983, the mother ship conducted its first attack on the Nicaraguan Pacific Coast port of Corinto.

  The assault reinforced a campaign begun earlier. There had already been two strikes at Puerto Sandino, a receiving point for oil deliveries, and the raid on a town on the Gulf of Fonseca, evidently a suspected transshipment point for arms to El Salvador. This action relied upon FDN commandos because it involved combat on the ground inside Nicaragua. The attempt had failed.

  Then the CIA staged the attack on Corinto. The raid used the two speedboats, which crept in behind a Korean tanker and peeled off to fire at the shore. Eight storage tanks containing 3.4 million gallons of oil were set aflame. A freighter loaded with cooking oil suffered slight damage. The Exxon Corporation ordered its tankers to avoid Nicaraguan waters. On October 21 the campaign moved to the Atlantic coast after the mother ship transited the Panama Canal.

  The CIA then raided Puerto Cabezas, known to an earlier generation of spooks as the operational base for the Bay of Pigs. With this CIA raid the secret war had come full circle for the people of one Nicaraguan village.

  In late October the Sandinistas countered, declaring an offshore security zone twenty-five miles deep. Foreign aircraft and ships were to get permission to enter two weeks in advance. While the U.S. Navy observed territorial waters in conducting De Soto patrols, air force SR-71s ostentatiously broke the sound barrier over Nicaragua, hitting towns with unnerving sonic booms. In the face of growing shortages, the Sandinistas increased gasoline rationing. At Corinto 25,000 residents were temporarily forced from their homes by oil fires.

  The CIA designed simple but effective mines whose prototype had been a sewer pipe stuffed with explosives, up to three hundred pounds of C-4 plastic. Tests took place at the Naval Surface Weapons Center, and about six hundred mines were fabricated and assembled in Honduras. The agency called them firecracker mines, but C-4 is powerful, and hundreds of pounds could do real damage.