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Two drug dealers could not have financed the CIA-backed Contras in Nicaragua because they spent most of their money on high living and bad investments, the Los Angeles Times reported.

Norvin Meneses and Danilo Blandon gave "well under $50,000" to the rebels fighting the Marxist Sandinista government in the 1980s and wasted profits by using drugs themselves, an associate of the two men told the newspaper."Not only was this the gang that couldn't shoot straight, this was the gang that couldn't stay straight," said the associate, who insisted on anonymity.

The report is the latest to follow a San Jose Mercury News series that said the San Francisco-area dealers sold tons of cocaine to Los Angeles street gangs and funneled millions in drug profits to a CIA-run guerrilla army.

The three-part series, called "Dark Alliance," published in August by the Mercury News, said Contra associates trafficked drugs in the United States. The series has prompted investigations by the CIA, Justice Department and House Intelligence Committee.

The series triggered widespread anger in the black community over whether the CIA was directly responsible for instigating the illicit crack trade, although it never makes that explicit charge.

The Times said the associate of the Nicaraguan pair had access to their books during the early 1980s. A second source corroborated the estimate, the paper said.

Meneses and Blandon, who were civilian leaders of an anti-communist commando group run by the CIA, consumed so much cocaine themselves that they nearly defaulted on what they owed to Colombian suppliers, the associate told the Times.

Intense competition in the cocaine trade and bad investments also kept a lid on how much they could send the Contras, he said.

Blandon, now an informant for the Drug Enforcement Administration, told a federal court his biggest customer was a crack dealer who sold cocaine to street gangs in the Los Angeles area.

Blandon testified that Meneses approached him in 1982 to propose they raise money for the Contras by selling cocaine. Meneses denied it.

"Everything that Blandon said about selling drugs is a lie," he told the Times from a Managua prison.

Government officials said the CIA had no knowledge of any drug money being used to help the Contras.

"I don't remember seeing anything like that, and I think I'd remember if I had," said former CIA Director Robert Gates.

Current CIA director John Deutsch said last month an initial review has found no evidence the agency knew about trafficking.

But Jack Blum, chief investigator for a congressional panel that probed charges of CIA-sanctioned drug trafficking in the late 1980s, said "people connected with the U.S. government" were deeply involved.

"Did the CIA have agents in Latin America selling drugs to fund the Contras? Categorically, absolutely not," Blum said. "But that's the wrong question.

"If you ask: In the process of fighting a war against the Sandinistas, did people connected with the U.S. government open channels which allowed drug traffickers to move drugs to the United States, did they know the drug traffickers were doing it, and did they protect them from law enforcement? The answer to all those questions is yes," he said.