Walter "Wally" Grasheim was a New York weapons dealer and U.S. military contractor based in [[San Salvador]], [[El Salvador]], who was raided by [[DEA]] agent [[Celerino Castillo]] on September 1, 1986. The raid uncovered a massive weapons cache, U.S. Embassy license plates and IDs, and evidence linking Grasheim to the Contra operation at [[Ilopango Airbase|Ilopango Air Force Base]].[^1] ### Background The tall, bearded arms broker was the Salvadoran sales representative for the Litton Corporation and other American weapons manufacturers, with a booming business selling night vision goggles, Steyer sniper rifles, and assorted military gear to the Salvadoran military. He was also advising and training Salvadoran army units in long-range reconnaissance operations on behalf of the U.S. government.[^1] ### The Raid Denied access to the military side of Ilopango, Castillo targeted Grasheim as an off-base target linked to the Ilopango operation. One of Castillo's informants told him Grasheim was intimately involved with the Contra drug operation at the base, and DEA computers turned up several references to Grasheim as a suspected drug trafficker. Salvadoran police working with Castillo raided Grasheim's elegant hillside home in San Salvador. A pound of marijuana was found, along with an extraordinary weapons cache: "Some of the rooms in the house had munitions and explosives piled to the ceiling, including automatic weapons, M-16's, hand grenades and C-4 [plastic explosives]." The raid also uncovered U.S. Embassy license plates, radios, and IDs in Grasheim's name.[^1] ### Grasheim's Claims Grasheim strenuously denied involvement with either the Contras or drugs and believed Castillo was duped by informants working for the [[Central Intelligence Agency]]. "The Agency put Castillo onto me as a way of getting him away from whatever it was they were doing at Ilopango," Grasheim insisted. "The person who claimed I was a drug trafficker was on the payroll of the CIA. I've never been involved with drugs in my life." The marijuana found at his house, Grasheim said, probably belonged to a U.S. Army colonel who was a frequent visitor. Grasheim said the weapons were legally his.[^1] ### CIA Infiltration of Castillo's Investigation The Justice Department Inspector General's report partially confirmed Grasheim's account. Castillo's informant Murga, who directed Castillo toward Grasheim by fingering him as "head of smuggling operations at Ilopango," was indeed a CIA asset and had been for some time. Soon after putting Castillo onto Grasheim, the CIA demanded Murga back. Castillo's boss Robert Stia "recalled being asked by the CIA station chief in El Salvador to relinquish the use of informant" Murga. "The Station Chief had explained that the CIA had established the informant before he had ever worked for the DEA" and wanted the DEA to stop using him because "he was currently a CIA informant." Stia complied but complained internally that the CIA had cost the DEA a valuable asset.[^1] ### Footnotes [^1]: Gary Webb, *Dark Alliance*, Chapter 13: "The wrong kind of friends"