Chagra and ACT II’s drug network would also lead to large-scale corruption within the DEA, Kentucky law enforcement, and even the Kentucky Governor’s mansion. This has been extensively covered by Sally Denton’s excellent book, The Bluegrass Conspiracy. The book also documented rumors of more meaningful connections, such as rumors that ACT II’s drug operations were helping support the United States’ covert operations in Nicaragua, El Salvador, and South Africa. Ralph Ross, the Lexington Officer investigating the case, became convinced that ACT II was involved in Oliver North’s Iran-Contra network, which provided support to him through both CIA and DEA resources.
Direct links between ACT II and the Agency have been suspected and alleged since the 1980s, when ACT II and his associate Bradley F. Bryant, along with two dozen other men, stole weapons from the China Lake Naval Weapons Center. This theft was later linked to former CIA employees Edwin P. Wilson and Frank Terpil as part of the Arms for Libya controversy which Bryant later stated that they believed was authorized by CIA. The Arms for Libya controversy ultimately involved Thomas Clines and Theodore Shackley, also former CIA employees, and military officers such as Major General Secord and Colonel Oliver North. When arrested in connection with the scandal, Bryant had reportedly had a “listing [of] poisons used by the CIA and a book entitled: “The Top Secret Radio Frequencies of the U.S. Government.”