MORLEY SAFER: Congressman Lester Wolff, you're chairman of the House Committee on Narcotics. You say you have information that suggests that Fidel Castro has a part of some kind in the cocaine traffic into the United States?

REPRESENTATIVE LESTER WOLFF [Select Committee on Narcotics Abuse and Control]: Yes, from a variety of sources we have learned of a connection between Fidel Castro and an American banking corporation that tied very closely - this corporation being tied very closely to cocaine trafficking in the United States.

MORLEY SAFER: The mystery of the Castro connection is a tangled web of story that 60 MINUTES came across in the course of putting together a report on cocaine traffic into this country. There are elements in this story and accusations that quite honestly are difficult to believe; loose ends that somehow make no sense. For example, you will hear that Fidel Castro is accused of being an original investor in a financial institution among whose purposes were the laundering of money earned through the traffic of narcotics into the United States.

We do not report this lightly; indeed, we would not report it at all if we were not able to confirm that a number of federal and local agencies are engaged in active investigation of these charges. It could be that someone or some group is behind a campaign of disinformation - of dirty tricks - to discredit Castro and destroy the change of improving relations between the United States and Cuba. But we know of nothing to support that possibility. What we do know is that an international financial empire based in Coral Gables, Florida, called WFC, is the target of a deep investigation by federal and local agencies, and a federal grand jury in Florida; that WFC has connections throughout Latin America and beyond; and that federal agencies allege that WFC has been used to launder money earned through illicit traffic in narcotics, principally cocaine, whose street value is estimated to be one billion dollars a year in the United States. WFC is controlled by a Cuban exile, now an American citizen, named Guillermo Hernandez-Cartaya. Mr. Cartaya was involved in the Bay of Pigs invasion of Cuba in 1961, and has strong connections with anti-Castro Cubans in Florida. And yet it is alleged that he was engaged in, at the very least, a financial arrangement with Fidel Castro. We have been able to confirm that this alleged arrangement is being investigated by the Justice Department. However, no one in the federal agencies involved would agree to an on-the-record interview. So we turned to the Congress, and with the information we had asked the chairman of the House Committee on Narcotics, Congressman Lester Wolff of New York, point-blank if he knew of any investigation into a Castro-Cuba cocaine connection. And sure enough, he did. In fact his own committee is investigating these very charges.

Your sources of information, I've got to ask you who they are?

REPRESENTATIVE LESTER WOLFF [Select Committee on Narcotics Abuse and Control]: They are from a variety of governmental sources. It's not just one source. Several sources are involved.

Let me quote form the report of my investigators:

We previously reported allegations from an informant to a local law enforcement agency to the effect that Fidel Castro was linked to the activities of WFC. We now have additional criminal investigative information from federal law enforcement agencies which support the earlier allegations. Specifically, that Castro is alleged to have supplied part of the start-up money for WFC.

SAFER: You- you're saying that Castro provided the start-up money, the seed money, for a corporation called WFC? Whose purpose was what?

WOLFF: Banking, obviously. Going into a- variety of international ventures. The- the investigation that we have going on now is investigation into transactions that involve narcotics.

SAFER: Buying and selling of drugs? What- how do you mean?

WOLFF: Washing of money primarily.

SAFER: Engaged in the trade, or simply washing the funds? I don't follow.

WOLFF: Now, whether it's washing the money of taking payment for the- the transactions, this has to be developed as yet.

One specific area that is known now is the fact that the company was instrumental in arranging for a loan to Colombia. This loan was for $100-million. And from our reports, the loan was made under the direction of Fidel Castro for the purpose of, ostensibly, opening political relations between Cuba and Colombia; but at the same time, an ancillary part of this was an agreement between the financial company and- and the Colombian government - people within the Colombian government - wherein the exportation of narcotics would be facilitated by the ancillary organizations of WFC.

SAFER: You say that Castro was instrumental in arranging a loan for Colombia through WFC. Now, we do know that Colombia is the source of about 70 percent of the cocaine that does come into this country. It's a major supplier of cocaine to the United States. How do you mean Castro was instrumental? What was his involvement? Just take it step by step.

WOLFF: According to the information we have, Castro had to approve this loan, and used his good offices in arranging it.

SAFER: His good offices with WFC or his good offices in Colombia?

WOLFF: This is- it certainly was not in Colombia. But there are- the information we have - and this is all that we can go by - is that he was instrumental in the approval of the loan by Colombia.

SAFER: Can you help- can you read from some of what you have and perhaps make it clearer?

WOLFF: The-- this is an official report we have here. "A hundred million dollar loan was arranged for the government of Colombia, March of- April 1975." A-And I'm going to eliminate the- the name of the source, but it's a government agency has stated: "The loan was made under the direction of Fidel Castro for the purpose of opening political relations between Cuba and Colombia." Now that, obviously, was the- the- the frontispiece for this. "And also that an agreement was said to have been made between the WFC and the Colombian government wherein the exportation of narcotics would be facilitated by WFC control sources."

SAFER: What does that mean - facilitated?

WOLFF: Well, I guess you can make you own interpretation of that.

SAFER: Beyond- beyond what you're giving us here, you'd be guessing?

WOLFF: I- that's correct.

SAFER: Well, this suggests more than collusion; deep, deep corruption within the government of Colombia.

WOLFF: Well, there would have to be some individual or groups of- a group of individuals who would agree to such an agreement. Now the- the people who are involved are unknown to us at the present time. However, it is safe to assume that- and- and I have spoken to Lopez Michelsen. I- I-

SAFER: This is the President of Colombia?

WOLFF: President of Colombia. I'm convinced that he had no role in this whatsoever. But that there were middle-echelon people who were able to - as the report says - facilitate WFC's operations when it came to the narcotics situation in Colombia.

SAFER: We've looked into that loan to Colombia in 1975 - a hundred million dollar loan - and, indeed, WFC did have an involvement to the tune, I believe, of $10-million, and other banks - legitimate, one presumes - had the rest of the loan. Now that's a legitimate loan. It was voted upon by the Senate for Colombia. It was for a very specific purpose, which was to- to finance an - an agricultural operation. And the loan is being repaid. So, I've got to tell you that your information about that loan does not seem to quite hold up.

WOLFF: Well, I- I don't question the people who made the loan. I don't question the government of Colombia for the purposes for which the loan is- is being put. But it's quite obvious that there was something that took place outside of the loan agreement that was part of the trafficking situation.

SAFER: Are you saying that there was a- a secret protocol written with members of the Colombian government which had to do not with the- the world of finance but with the world of cocaine?

WOLFF: Much of what is done in illicit trafficking is not done with a signature to a piece of paper. They're done with a handshake. And our sources- and this is not in the nature of some wild-eyed charge being made by some individual or- or group, but this has come to us from a variety of sources, respected investigatory sources and intelligence sources, within our government.

SAFER: FBI?

WOLFF: Yes.

SAFER: CIA?

WOLFF: Well, what I'm saying to you is the fact that the intelligence community has been able to filter some of this information into- well, we have- we have been made privy to information that has been filtered in by the intelligence community.

SAFER: Now, your sources - I want to get this perfectly clear - say Castro, not Cuba, vaguely-

WOLFF: No.

SAFER: -that Cuba is up to some trick somewhere?

WOLFF: That's correct.

SAFER: Fidel Castro?

WOLFF: That's correct.

SAFER: Surely it's crossed your mind that- that this could be a massive campaign of disinformation, dirty tricks, against Castro for whatever purpose - to destroy the possibility of good relations with Cuba, to discredit Castro not only in the United States but around the world. Is that a possibility?

WOLFF: That could be a possibility, but because of the information coming to us and having been checked and rechecked by our committee investigators through the various agencies that have been involved in- in providing this information, it would be hard- we would be hard put to label it as an attempt such as that - because the- the confirmation has come from a variety of sources, not from just one source.

SAFER: These documents you have here, who else has them? Who knows about this?

Let me- let go through a checklist with you.

WOLFF: Right.

SAFER: Does the White House know?

WOLFF: The White House, I- I believe, should be informed of this, if they have not been, because our documents, as well as the documents from which this material came, have been in possession of the executive agencies.

SAFER: The CIA?

WOLFF: Yes.

SAFER: The FBI?

WOLFF: Yes.

SAFER: Justice Department?

WOLFF: Yes.

SAFER: The Drug Enforcement Administration?

WOLFF: Yes.

SAFER: The State Department?

WOLFF: Yes.

SAFER: I've got to get back to- to the Castro story.

WOLFF: All I'm telling you is the fact that from several very reliable sources we have been able to confirm the fact that he was in the start-up of the operation, and has had continuing contacts through operatives who come back and forth to the United States.

SAFER: Between Havana and Florida?

WOLFF: Uh-hmm.

SAFER: Are there links with organized crime?

WOLFF: Yes, they are.

SAFER: Congressman Wolff, I- I've got to be perfectly honest with you. We were on to much of this story. We'd heard the reports; we'd heard rumors; we checked them, we double-checked them, we triple-checked some of these things in some cases before we came to you. But quite honestly, we probably would not have gone on the air with this story unless we were able to have it - at least the accusations - confirmed by a living, breathing person of authority like yourself. Why have you agreed to this? Why have you agreed to confirm what we have found out?

WOLFF: I have agreed to confirm it because I feel that we have to reach into the heart of the illicit narcotics traffic in order to do something about this, and I do believe that this situation, when it is fully developed, will break the back of the cocaine connection into the United States.

SAFER: There's yet another allegation about Castro and WFC, and that is that beyond cocaine there is a connection with traffic in weapons - weapons, our source tell us, were for terrorist purposes. And Congressman Wolff confirms that this, too, is part of his committee's investigation.

If all these allegations are true, why would Castro do it? As a way of harassing the united States? Possible, but unlikely. As a means of financing Cuba's growing and costly foreign adventures, including its overseas intelligence operations? Possible. All of them puzzling possibilities, but the most puzzling question of all is that if Castro is indeed a major factor in the cocaine connection, why would he choose as a partner a man with such a strong and clear reputation for fighting against Castro? We tried, unsuccessfully, to reach Mr. Cartaya. But in the course of our inquires in south Florida, we learned that it is not impossible that Cubans with links to the CIA also have links to the cocaine trade and, at the same time, have links with Castro's Cuba.

It all has an "Alice in Wonderland" quality to it, and as Alice said, "It just gets curioser and curioser."