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It was the sort of sensational investigative story that brings a newspaper attention, praise, often prizes. A three-part series in the San Jose Mercury News last August, the product of a year's work by reporter Gary Webb, alleged that the crack epidemic in inner-city Los Angeles was largely started by Nicaraguan drug suppliers who introduced the new form of cocaine into the ghetto and used the profits to help support the antigovernment rebels known as contras.

Most explosively, the series suggested CIA complicity in, or at least knowledge of, the operation. Hyped by provocative headlines (the series was titled "Dark Alliance") and splashed over the Internet (accompanied by a logo that superimposed the CIA's insignia on the image of a crack smoker), the story was perfect fodder for persistent suspicions in the African-American community of a government conspiracy against blacks. The outrage percolated on talk radio and on the Internet until Jesse Jackson and other black leaders began demanding a full accounting. The CIA conducted an internal review; congressional hearings were convened.

But the story also provoked an extraordinary backlash in the press. The New York Times, Washington Post and Los Angeles Times all eventually ran lengthy investigative pieces or multipart series that disputed major points in the Mercury News story, especially its implication that the CIA was a party to getting poor blacks hooked on crack. After defending the series with diminishing resolve, Mercury News executive editor Jerry Ceppos finally confessed in an extraordinary Sunday editorial last week that he too found the story flawed.

After an internal re-examination of the piece by seven reporters and editors, Ceppos concluded that the series "did not meet our standards" in several respects. The story fingered Nicaraguan drug supplier Oscar Danilo Blandon Reyes as the pivotal figure who funneled money from the L.A. crack trade to the contras, but failed to note that Blandon (who later became a U.S. government informant) testified that he stopped sending money to the contras in 1982, well before he began trafficking drugs in L.A. Moreover, Ceppos admitted, the assertion that "millions in profits" from drug dealing went to the contras was only an estimate, and may have been exaggerated.

The editor also acknowledged that the story's contention that crack smoking in the inner city can be traced to a single Nicaraguan drug ring (Blandon was called "the Johnny Appleseed of crack") was an "oversimplification" and ignored evidence that the crack epidemic was a "complex phenomenon that had more than one origin." Finally, Ceppos admitted, the Mercury News "did not have proof" that top CIA officials knew the contras were getting money from the L.A. drug connection. "If we were to publish 'Dark Alliance' today," he said, "it would be edited differently. It would state fewer conclusions as certainties and be clearer in explaining why, given the thicket of sometimes conflicting evidence, we drew the conclusions that we did."

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