-Caveat Lector-
an excerpt from:
Drugs, the U.S., and Khun Sa
Francis W. Belanger©1989
Editions Duang Kamol
Siam Square,
Bangkok, Thailand
ISBN 974-210-4808
--[1]--
THE ROLE OF THE CIA
THE CIA AND THE DRUG INDUSTRY
The mid-1960s marked the peak of the European heroin industry, and shortly
thereafter it went into a sudden decline. In the early 1960s the Italian
government launched a crackdown on the Sicilian Mafia, and in 1967 the
Turkish government announced that it would begin phasing out cultivation of
opium poppies on the Anatolian plateau in order to deprive Marseille’s heroin
laboratories of their most important source of raw material. But, unwilling
to abandon their lucrative narcotics racket the Corsican syndicates—and the
American Mafia—shifted their sources of supply to Southeast Asia, where
surplus opium production and systematic government corruption created an
ideal climate for large scale heroin production.
And once again American foreign policy played a role in creating these
favorable conditions. During the early 1950s the CIA had backed the formation
of a Nationalist Chinese guerilla army in Burma, a group which still controls
as much as half of the world's opium supply, and in Laos the CIA created a M
eo mercenary army whose commander manufactured heroin for sale to, among
others, American GIs in South Vietnam. The State Department provided
unconditional support for corrupt governments known to be engaged in the
international drug traffic. In late 1969 new heroin laboratories sprang up in
the tri-border and where Burma, Thailand, and Laos converge, and
unprecedented quantities of heroin started flooding into the United States.
Nurtured by a seemingly limitless flow of heroin, America's total number of
addicts skyrocketed.
The bloody Saigon street fighting of April-May 1955 marked the end of French
colonial rule and the beginning of direct American intervention in Vietnam.
When the First Indochina war came to an end, the French government had
planned to withdraw its forces gradually over a two- or three-year period in
order to protect its substantial political and economic interests in southern
Vietnam. The armistice concluded at Geneva, Switzerland, in July 1954 called
for the French Expeditionary Corps to withdraw into the southern half of
Vietnam for two years, until an all-Vietnam referendum determined the
nation's political future. Convinced that Ho Chi Minh and the Communist Viet
Minh were going to score an overwhelming electoral victory, the French began
negotiating a diplomatic understanding with the government in Hanoi.
But America's moralistic cold warriors were not quite so flexible. Speaking
before the American Legion Convention several weeks after the signing of the
Geneva Accords, New York's influential Catholic prelate, Cardinal Spellman,
warned that:
"If Geneva and what was agreed upon there means anything at all, it means ...
taps for the buried hopes of freedom in Southeast Asia! Taps for the newly
betrayed millions of Indochinese who must now learn the awful facts of
slavery from their eager Communist masters!"
Rather than surrendering southern Vietnam to the "Red rulers' godless goons,"
the Eisenhower administration decided to create a new nation where none had
existed before. Looking back on America's post-Geneva policies from the
vantage point of the mid 1960s, the Pentagon Papers concluded that South
Vietnam" was essentially the creation of the United States.
The French had little enthusiasm for this emerging nation and its premier,
and so the French had to go. Pressured by American military aid cutbacks and
prodded by the Diem regime, the French stepped up their troop withdrawal. By
April 1956 the once mighty French Expeditionary Corps had been reduced to
less than 5,000 men, and American officers had taken over their jobs as
advisers to the Vietnamese army. The Americans criticized the French as
hopelessly "colonialist" in their attitudes, and the French officials
retorted that the Americans were naive. During this difficult transition
period one French official denounced "the meddling Americans who, in their
incorrigible guilelessness believed that once the French Army leaves,
Vietnamese independence will burst forth for all to see."
But America's fall from innocence was not long in coming. Only seven years
later, the U.S. Embassy and the CIA engineered a coup that toppled Diem and
left him murdered in the back of an armored personnel carrier. And by 1965
the United States found itself fighting a war that was almost a carbon copy
of France’s colonial war. The U.S. Embassy was wearisomely trying, but
effectually unable, to manipulate the same clique of corrupt Saigon politicos
that had confounded the French in their day. The U.S. Army looked just like
the French Expeditionary Corps to most Vietnamese, only instead of Senegalese
and Moroccan colonial levies, the U.S. Army was assisted by Thai and South
Korean troops. The CIA and the U.S. special forces (the "Green Berets") were
assigned to train the very same hilltribe mercenaries that the French MACG
(the "Red Berets") had recruited ten years earlier.
Given the striking similarities between the French and American war machines,
it is hardly surprising that the broad outlines of "operation X" (Although
the French colonial government initiated a program to eliminate opium
addiction, the French intelligence and paramilitary agencies took over the
opium traffic in order to finance their covert operations during the First
Indochina War of 1946-1954.) reemerged after U.S. intervention. As the CIA
became involved in Laos in the early 1960s it became aware of the truth of
Colonial Trinquier's axiom, "To have the Meo, one must buy their opium." At a
time when there was no ground or air transport to and from the mountains of
Laos except CIA aircraft, opium continued to flow out of the villages of Laos
to transit points such as Long Tieng. There, government forces, this time
Vietnamese and Lao instead of French, transportcd narcotics to Saigon, where
parties associated with the Vietnamese political leaders were involved in the
domestic distribution and arranged for export to Europe through Corsican and
CIA syndicates. And just as the French high commissioner had found it
politically expedient to overlook the Binh Xuyen's involvement in Saigon's
opium trade, the U.S. Embassy, as part of its unqualified support of the
Thieu Ky regime, looked the other way when presented with evidence that
members of the regime were involved in the GI heroin traffic.
In Laos, CIA clandestine intervention produced changes and upheavals in the
narcotics traffic. When political infighting among the Lao elite, coupled
with the escalating war in Vietnam, forced the small charter airlines owned
by the Corsican syndicates out of the opium business in 1965, the CIA's
airline, Air America, began flying Meo opium out of the hills to Long Tieng
and Vientiane. CIA cross-border intelligence missions launched Into China
from Laos reaped an unexpected dividend in 1962 when the Shan rebel leader
who had organized the forays for the agency began financing the Shan
nationalist cause; he did so by selling Burmese opium to another CIA protege,
Laotian General Phoumi Nosavan. The business alliance between General Phoumi
and the Shans opened up a new trading pattern that diverted increasingly
significant quantities of Burmese opium from their normal marketplace in
Bangkok. By the late 1960s U.S Air Force bombing had further disrupted opium
production in Laos by forcing the majority of the Meo opium farmers to become
refugees. In response, flourishing Laotian heroin laboratories—which were the
major suppliers for the GI users in Vietnam—simply increased their imports of
Burmese opium through pre-existing trade relationships.
The importance of these CIA clients in the subsequent growth of the Golden
Triangle's heroin trade was revealed inadvertently, by the Agency itself
when it leaked a classified report on the Southeast Asian opium traffic to
the New York Times. The CIA analysis identified twenty-one opium refineries
in the tri-border area where Burma, Thailand, and Laos converge and reported
that seven were capable of producing 90 to 99 percent pure No. 4 heroin. Of
these seven heroin refineries, "The most important are located in the areas
around Tachilek, Burma; Ban Houei Sai and Nam Keung in Laos; and Mae Salong
in Thailand."
Although the CIA did not see fit to mention it, many of those refineries were
located in areas totally controlled by paramilitary groups closely identified
with American military operations in the Golden Triangle. Mae Salong was
headquarters of the Nationalist Chinese Fifth Army, which had been
continuously involved in CIA intelligence and counterinsurgency operations
since 1950. According to a former CIA operative who worked in the area for a
number of years, the heroin laboratory at Na Kueng was protected by Major
Chao La, commander of Yao mercenary troops for the CIA in northwestern Laos.
One of the heroin laboratories near Ban Huay Sai reportedly belonged to
General Ouane Rattikone, former commander in chief of the Royal Laotian
Army—the only army in the world, except for the U.S. army itself, to be
entirely financed by the U.S. government. The heroin factories near Tachilek
were operated by rebel units from Burma and Shan rebel armies who even now
control a large percentage of the narcotics traffic out of Burma. Although
few of these Shan groups still have any relation with the CIA, one of the
most important chapters in the history of the Shan States' opium trade
involves a Shan rebel army under Khun Sa, who is still receiving CIA support,
either directly or indirectly.
Other sources have revealed the existence of an important heroin laboratory
that operated near Vientiane under the protection of General Ouane Rattikone.
And finally, the U.S. Bureau of Narcotics had reports that General Vang Pao,
commander of the CIA's 'secret army', had been operating a heroin factory at
Long Tieng, headquarters for CIA sponsored operations in northern Laos.
In the fertile minds of the geopolitical strategists in the CIA's Special
Operations division, potential infiltration routes stretched from the Shan
hills of north-eastern Burma, through the rugged Laotian mountains, and then
southward into the Central Highlands of South Vietnam. According to one
retired CIA operative, Lt. Col. Lucien Conein, Agency personnel were sent to
Laos in 1959 to supervise eight Green Beret teams who were then training Meo
guerrillas on the Plain of Jars. In 1960 and 1961 the CIA recruited elements
of Nationalist Chinese Paramilitary units based in northern Thailand to
inf[i]ltrate into China-Burma border areas; they also sent Green Berets into
South Vietnam's Central Highlands to organize hilltribe commando units for
intelligence and sabotage patrols along the Ho Chi Minh Trail. Finally, in
1962 one CIA operative based in northwestern Laos began sending trained Yao
and Lahu tribesmen into the heart of China's Yunnan Province to monitor road
traffic and tap telephones.
While the U.S. military required half a million troops to fight a
conventional war in South Vietnam, the mountain war had needed only a handful
of Americans. American paramilitary personnel in Laos tended to serve long
tours of duty, some for a decade or more, and had been given an enormous
amount of personal power. If the nature of the conventional war in South
Vietnam is best analyzed in terms of the faceless bureaucracies that spewed
out jargonized policies, the secret war in Laos is most readily understood
through the men who fought it.
THE OPERATIVES
Three men, perhaps more than any of the others, have left their personal
imprint on the conduct of the secret war: Edgar Buell, Anthony Poe, and
William Young. And each in his own way illustrates a different aspect of
America's conscious and unconscious complicity in the Laotian opium traffic.
William Young, perhaps one of the most effective agents ever, was born in the
Burmese Shan States, where his grandfather had been a missionary to the hill
tribes. A gifted linguist, Young spoke five of the local languages and
probably knew more about mountain minorities than any other American in Laos;
the ClA rightly regarded him as its "tribal expert." Because of his deep and
sophisticated understanding of the hill tribes, he viewed the opium problem
from the perspective of a hilltribe farmer. He felt nothing should be done to
obstruct the opium traffic. Young explained his views: "As long as there is
opium in Burma, somebody will market it."
Anthony Poe was indifferent to the problem. A marine in the Pacific during
World War II, Poe joined the CIA's Special Operations division sometime after
the war and quickly earned a reputation as one of its crack clandestine
warfare operatives in Asia, playing an important role in the CIA's Tibetan
operations. Poe's first assignment in Indochina was with anti-Sihanouk
mercenaries along the Cambodian border in South Vietnam, and in 1963 he was
sent to Laos as chief advisor to General Vang Pao. Several years later he was
transferred to northwestern Laos to supervise Secret Army operations in the
tri-border area and to work with Yao tribesmen. The Yao remember "Mr. Tony"
as a drinker and as an authoritarian commander who bribed and threatened to
reach his goals, as a mercurial leader who rewarded his soldiers 500 kip (one
dollar) for an ear and 5,000 kip for a severed head—when accompanied by a
Pathet Lao army cap. He was indifferent toward the opium traffic and ignored
the prospering heroin factories along the Mekong River, not once stopping any
of Ouane Rattikone's officers from using U.S. supplied facilities to
administer the drug traffic.
The most curious of this triumvirate is Edgar "Pop" Buell, originally a
farmer from Steuben County, Indiana. Buell first came to Laos in 1960 as an
agricultural volunteer for International Voluntary Services (IVS), a Bible
Belt counterpart of the Peace Corps. He was assigned to the Plain of Jars,
where the CIA was building up its secret Meo army, and became involved in the
Agency's activities largely through circumstance and his own God-given
anti-Communism. As CIA influence spread through the Meo villages ringing the
Plain of Jars, Buell became a one-man supply corps, dispatching Air America
planes to drop rice, meat, and other necessities the CIA had promised to
deliver. Buell feigned being the innocent country boy, claiming his work was
humanitarian aid for Meo refugees. Nevertheless, his operations were clearly
an integral part of the CIA program. In his efforts to bolster the Meo
economy and to increase the tribe' military effectiveness, Buell utilized his
agricultural skills to improve Meo techniques for planting and cultivating
opium. "If you're gonna grow it, grow it good," Buell told the Meo.
THE EMERGENCE OF THE KMT
Just as the work of French clandestine services in Indochina had enabled the
opium trade to survive a government repression campaign, so some CIA
'actives' in Burma helped transform the poppy-growing Shan States from a
relatively backwater into the largest opium-growing center in the world. The
precipitous collapse of the Nationalist Chinese or Kuomintang (KMT)
government in 1949 convinced the Truman administration that it had to stem
"the southward flow of communism" into Southeast Asia. In 1950 the Defense
Department proffered military aid to the remnants of the defeated Kuomintang
army in the Burmese Shan States for a projected invasion of southern China.
Although the KMT army was to fail in its military objectives, it did succeed
in monopolizing and expanding the Shan States' opium trade.
When the People's Liberation Army entered Yunnan in it December 1949, Lu Han
armed the populace, who then drove Chiang's troops out of the cities.
Nationalist Chinese stragglers began crossing into Burma in late 1949, and in
January of 1950 remnants of the Ninety-third Division, Twenty-sixth Army, and
General Li Mi's Eighth Army arrived in Burma. Five thousand of General Li
Mi's troops who had crossed into Laos instead of Burma were quickly disarmed
by the French and interned on Phu Quoc Island in the Gulf of Thailand, from
where they were repatriated to Taiwan in June 1953.
The Burmese army was, however, less successful than the French in dealing
with the KMT. By March 1950 some fifteen hundred of the displaced troops had
crossed the border and were occupying territory between the city of Kengtung
and Tachilek. In June, the Burmese army commander for Kengtung State demanded
that the KMT either surrender or leave Burma immediately. When Li Mi refused,
the Burmese launched an attack from Kengtung and captured Tachilek in a
matter of weeks. Two hundred of Li Mi's troops fled into Laos where they were
interned, but the remainder retreated to Mong Hsat, about forty miles west of
Tachilek and fifteen miles from the Thai border. Because the Burmese army had
been weakened by three years in central Burma battling four major rebellions,
its Kengtung contingent was inadequate to pursue the KMT through the
mountains to Mong Hsat. But, at the time, it seemed only a matter of months
until the Burmese troops would become available for the final assault on the
weakened KMT forces.
At this point the CIA entered the list of combatants on the side of the KMT,
drastically altering the balance of power. The Truman administration,
ambivalent toward the conflict in Southeast Asia since taking office in 1945,
was shocked into action by the sudden collapse of Chiang Kai-shek's
Kuomintang regime. Government agencies scrambled to devise policies "to block
further Communist expansion in Asia," and in April 1950 the Joint Chief of
Staff (JCS) advised the Secretary of Defense to implement "a program of
special covert operations designed to interfere with Communist activities in
Southeast Asia..." The exact details of such "special covert operations" plan
ned for Burma were not spelled out in the JCS memo or any of the other
Pentagon Papers because it was one of the most heavily classified operations
ever undertaken by the CIA: the U.S. ambassador to Burma was not told; top
ranking officials in the State Department were kept in the dark; and it was
even hidden from the CIA's own deputy director for intelligence.
The first signs of direct CIA aid to the KMT appeared in early 1951, when
Burmese intelligence agents reported that unmarked C46 and C-47 transport
aircraft were making at least five parachute drops a week to KMT forces in
Mong Hsat. With its new supplies, the KMT underwent a period of vigorous
expansion and reorganization. Training bases were constructed near Mong Hsat
and staffed with instructors flown in from Taiwan.
KMT agents scoured the Kokang and Wa States along those Burma-China border
for scattered KMT survivors, and General Li Mi's force burgeoned to four
thousand men. In April 1950, Li Mi led the bulk of this force up the Salween
River to Mong Mao in the Wa States, where they established a base camp near
the China border. As more stragglers were rounded up, a new base camp was
opened at Mong Yang; soon unmarked C-47s were seen making air drops in the
area. After Li Mi recruited three hundred troops from Kokang State under the
command of the headman's younger sister, Olive Yang, more arms were dropped
to the KMT camp.
In April 1951, the attempted reconquest of Yunnan began when 2,000 soldiers
of the Yunnan Province Anti-Communist National Salvation Army based at Mong
Mao crossed the border into China. Accompanied by CIA advisors and supplied
by regular airdrops from unmarked C-47s, KMT troops moved northward in two
columns, capturing Kengma without resistance. However, as they advanced north
of Kengma, the People's Liberation Army (PLA) counterattacked. The KMT
suffered massive casualties, and several of their CIA advisors were killed.
Li Mi and his Salvation Army fled back to Burma after less than a week in
China. Undeterred by this crushing defeat, however, the General dispatched
his two thousand-man contingent at Mong Yang into southern Yunnan; they too
were quickly overwhelmed and driven back into Burma.
Rather than abandoning this doomed adventure, the CIA redoubled its efforts.
Late in 1951, the KMT reopened the old World War It landing strip at Mong
Hsat so that it could handle the large two- and four-engine aircraft flying
in directly from Taiwan or Bangkok. In November, Li Mi flew to Taiwan for a
vacation and returned three months later, to be soon followed by a CAT (Civil
Air Transport, later known as Air America) airlift, which flew seven hundred
regular KMT soldiers from Taiwan to Mong Hsat. Burmese intelligence reported
that the unmarked C-47s began a regular shuttle service with two flights a
week direct from Taiwan. A mysterious Bangkok-based American company named
Sea Supply Corporation began forwarding enormous quantities of U.S. arms to
Mong Hsat. Burmese Military Intelligence observed that the KMT began sporting
brand- new American M-1s, .50 caliber machine guns, bazookas, mortars, and
anti-aircraft artillery. With these lavish supplies, the KMT press-ganged
eight thousand soldiers from the hardy local hill tribes and soon tripled
their forces to twelve thousand.
After a year-long buildup, General Li Mi launched his final bid to reconquer
Yuman Province. In August 1952, 2,100 KMT troops from Mong Yang invaded China
and penetrated about sixty miles before the Chinese army drove them back into
Burma. There would be no more invasions. Although General Li Mi and his
American advisors had not really expected to conquer the vast stretches of
Yunnan Province with an army of twelve thousand men, they had been confident
that once the KMT set foot in China, the "enslaved masses" would rise up
against Mao and flock to Chiang Kai-shek's banner. After the three abortive
forrays had conspicuously failed to arouse the populace, General Li Mi
quietly abandoned the idea of conquering China and resigned himself to
holding the line in Burma.
The KMT ceased concentrating their forces in a few bases on the China border
and spread their troops out to control as much territory as possible. Since
the Burmese army was still preoccupied with insurgency in other parts of
Burma, the KMT soon became the only effective government in all the Shan
States territories between the Salween River and the China border (Kokang,
Wa, and Kengtung states). These territories were also Burma's major
opium-producing region, and the shift in KMT tactics allowed them to increase
their control over the region's opium traffic.
The KMT occupation centralized the marketing structure by using hundreds of
petty opium traders to comb the Shan highlands. The KMT also required that
every hilltribe farmer pay an annual tax in the form of opium. One American
missionary to the Lahu tribesmen of Kengtung State, the Reverend Paul Lewis,
recalls that the KMT tax stimulated a dramatic rise in the amount of opium
grown in the highland villages he visited. Tribes had very little choice in
the matter, and Lewis can still remember the agony of the Lahu who were
tortured by the KMT for failing to comply with their demands.
Many Chinese soldiers inevitably married Lahu tribeswomen, and such marriages
reinforced KMT control over the highlands and made it easier for them to
secure opium and recruits. Given their personal contacts in mountain
villages, their powerful army, and their control over the opium-growing
regions, the KMT were in an ideal position to force an expansion of the Shan
States' opium production when Yunnan's illicit production began to disappear
in the early 1950s.
Soon after their arrival in Burma, the KMT had formed a mountain transport
unit, recruiting local mule drivers and their animals. Almost all the KMT
opium was sent south to Thailand, either by mule train or aircraft. Since
most of their munitions and supplies were carried overland from Thailand, the
KMT mule caravans found it convenient to haul opium on the outgoing trip from
Mong Hsat and soon developed a regular caravan trade across the Thai border.
Burmese military sources claimed that much of the KMT opium was flown from
Mong Hsat in unmarked C-47s flying to Thailand and Taiwan. However it was
carried, once the KMT opium left Mong Hsat it was usually shipped to Chiang
Mai, where a KMT colonel maintained a liaison office with the Nationalist
Chinese consulate and with local Thai authorities. Posing as ordinary Chinese
merchants, the colonel and his staff used raw opium to pay for the munitions,
food, and clothing that arrived from Bangkok at the Chiang Mai railhead. Once
the material was paid for, it was the colonel's responsibility to to forward
it to Mong Hsat. Usually the KMT dealt with the commander of the Thai police,
General Phao, who shipped the opium from Chiang Mai to Bangkok for local
consumption and export.
While the three CIA-sponsored invasions of Yunnan, however feebly conceived
they may have been, at least represented a bona fide anti-Communist policy,
the next move defied all logic. With what appeared to be CIA support, the KMT
began a full-scale invasion of eastern Burma. In late 1952, thousands of KMT
mercenaries forded the Salween River and began a well-orchestrated advance.
The Burmese government claimed that this was the beginning of an attempt to
conquer the entire country. But in March 1953, the Burmese fielded three
crack brigades and quickly drove the KMT back across the Salween River.
Intriguingly, after a skirmish with the KMT at Wan Hsa La ferry, Burmese
soldiers discovered the bodies of three caucasians who bore no identification
other than some personal letters Washington and New York addresses.)
By now the issue had become such a source of international embarrassment
for the United States that Washington used its influence to convene, in May
of 1953, a Four-Nation Militiary Commission (the United States, Burma,
Taiwan, and Thailand) to deal with the problem. At the meeting (which was
held in Bangkok), Only after Burma took the, issue to the United Nations in
September did the Taiwan negotiators in Bangkok stop quibbling and agree to
the withdrawal of two thousand KMT troops; the evacuees would march to the
Burma-Thailand border, be trucked back to Chiang Rai, Thailand, and flown to
Taiwan General Chennault's CAT.
The Burmese, however, were suspicious of the arrangements from the very
beginning, and when representatives of the Four-Nation Military Commission
arrived in northern Thailand to observe the withdrawal, Thai police commander
Phao, refused to allow the Burmese delegation to accompany the others to the
staging areas. On the ninth of November, the U.S. ambassador to Taiwan,
Charlie L. Rankin, stated that if the the[sic] United States did not ease its
pressure, Chiang threatened to make public the CIA support of the KMT in
Burma. The American ambassador to Thailand, General William Donovan, cabled
back that the "Chicoms" and Soviets already knew about the CIA operations and
so he kept pressuring for withdrawl.
Although the continuing struggle faded from American headlines, in June 1955
the Rangoon Nation reported that six hundred KMT troops had been smuggled
into the Shan States from Taiwan. A new KMT commander was appointed, and a
headquarters complex was established at Mong Pa Liao near the Mekong River.
The KMT continued to rule the hilltribes with an iron hand. In 1957, an
American missionary reported:
"For many years there have been large numbers of Chinese Nationalist troops
in the area demanding food and money from the people. The areas in which
these troops operate are getting poorer and poorer and some villages are
finding it necessary to flee."
Not only did the KMT continue to demand opium from the tribes, but they
increased their activities in the narcotics trade as well. When the Burmese
army captured the KMT camp at Wanton in 1959, they discovered three
refineries of morphine base operating near a usable airstrip.
Although forgotten by the international press, the KMT guerrilla operations
continued to create problems for both the Burmese and Chinese governments.
When delegations from the Union of Burma and People's Republic of China met
to resolve a border dispute in the summer of 1960, they also concluded a
secret agreement for combined operations against the KMT at Mong Pa Liao.
This base, with a runway capable of handling even the largest transport
aircraft, was defended by some ten thousand KMT troops entrenched in an
elaborate fortified complex. After weeks of heavy fighting, five thousand
Burmese troops and three full People's Liberation Army divisions (totaling
20,000 men), finally overwhelmed the fortress on January 26, 1961. While many
of their hilltribe recruits fled into the nearby mountains, the crack KMT
retreated across the Mekong River into northwestern Laos. Burmese officers
were outraged to discover American weapons of recent manufacture and five
tons of ammunition bearing distinctive American labels. In Rangoon, 10,000
angry demonstrators marched in front of the U.S. Embassy, and Burma sent a
note of protest to the United Nations saying that "large quantities of modem
military equipment, mainly of Americans origin, have been captured by Burmese
forces."
The KMT shipped bountiful harvests to northern Thailand, where they were sold
to a CIA client, General Phao Sriyanonda of the Thai police. The CIA promoted
the Phao-KMT partnership in order to provide a secure rear area for the KMT,
but this strategic alliance soon became a pivotal factor in the growth of
Southeast Asia's narcotics traffic.
With CIA support, the KMT remained in Burma until 1961, when the Burmese army
drove them into Laos and Thailand. Bythis time the Kuomintang had already
used their control over the tribal populations to expand Shan State opium
production nearly tenfold—from less than 40 tons at the end of World War II
to estimated three hundred to four hundred tons by 1962. From bases in
northern Thailand, the KMT continues to this very day to dispatch mule
caravans into the Shan States to carry out the opium harvest. Today, nearly
thirty years after the CIA began supporting the KMT in the Golden Triangle
region, KMT 'soldiers' control almost half of the world's total illicit opium
supply and share about half of Southeast Asia's thriving heroin business.
At first glance the history of the KMT's involvement in the Burmese opium
trade seems to be just another case of a CIA client unilaterally taking
advantage of the agency's political protection to enrich itself from the
narcotics trade. But upon closer examination, the CIA appears to be much more
seriously compromised in the affair. The CIA fostered the growth of the
Yunnan Province Anti-Communist National Salvation Army in the borderlands of
northeastern Burma—a potentially rich opium-growing region. There can be no
question of CIA ignorance or naivete since as early as 1952 The New York
Times and other major American newspapers published detailed accounts of the
KMT's role in the narcotics trade. But most disturbing of all is the
coincidence that the KMT's Bangkok connection was the commander of the Thai
Police—and General Phao was the CIA's man in Thailand.
THE THAI ELITE
Government corruption is not just a problem in Thailand, it is a way of life.
Like every bureaucracy, the Thai government has elaborate organizational
charts marking out neatly delineated areas of authority. To the uninformed
observer it seems to function much like any other meritocracy, with
university graduates occupying government posts, careers advancing step by
step, and proposals moving up and down the hierarchy in a more or less
orderly fashion. But all of these these charts and procedures were (and are)
a facade, behind which operate powerful military cliques whose driving
ambition is to expropriate enough money, power, and patronage to become a
government within the government. These cliques are not ideological factions,
coteries of plotters united by greed and ambition.
A clique usually has its beginning in some branch of the military service,
where a hardcore of friends and relatives begin to recruit supporters from
the ranks of their brother officers. Since official salaries have always been
notoriously inadequate for the basic needs—not to mention the dreams—of many
officers, each rising faction must find itself a source of supplementary
income. While graft within the military itself provides a certain amount of
money, all cliques are eventually forced to extend their tentacles into the
civilian sector. A clique usually concentrates on taking over a single
government ministry or monopolizing a certain realm of business, such as the
rice trade or the lumber industry. By the time a clique matures it has a
highly disciplined pyramid of corruption. At the bottom, minor functionaries
engage in extortion or graft, passing the money up the ladder, where leaders
skim off vast sums for themselves divide the remainder among their loyal
followers. Clique members may steal from the official government, but they
usually do not dare steal from the clique itself; and the amount of money
they receive from the clique is rigidly controlled.
When such a clique grows strong enough to make a bid for national power, it
is inevitably forced to confront another in military faction. Such
confrontations account for nearly all the coups and counter-coups that have
determined the course of Thai politics ever since senior civil servants and
army officers ended the absolute monarchy in 1932.
>From 1947 to 1957, Thai politics was dominated by an intense rivalry between
two powerful cliques: one led by General Phao Sriyanonda and the other by
Marshal Sarit Thanarat. Both men were catapulted upward by the November 1947
coup which restored to power Thailand's wartime leader, Marshal Phibun
Songkhram. Too weak to execute the coup himself, Marshal Phibun had recruited
these two powerful army cliques. The clique led by Sarit was composed mainly
of ambitious young army officers; the other was led by the commander in chief
of the army, General Phin, and sparked by his aggressive son-in-law, Colonel
Phao Sriyanonda.
Soon after the triumvirate took power, the two army cliques began to squabble
over the division of the spoils. Military power was divided without too much
rancor when Phao became deputy director-general of the National Police. (When
Phao took over in 1951, his forty thousand police officers were an adequate
counterbalance to Sarit's forty-five thousand-man army.) And many of the
bureaucratic and commercial spoils were divided with equal harmony. An
exceptionally bitter struggle developed, however, over control of the opium
traffic.
The illicit opium trade had only recently emerged as one of the country's
richest economic assets. Its sudden, massive economic significance may have
served to upset the delicate balance of power between the Phao and Sarit
cliques. Although the official government Opium Monopoly had thrived for
almost a hundred years, by the time of the 1947 coup the high cost of
imported opium and the reasonably strict government controls made it an
unexceptional source of graft. However, the rapid decline in imports of
foreign opium and the growth of local production in the late 1940s and the
1950s suddenly made the opium trade worth fighting over.
At the first United Nations narcotics conference in 1946. Thailand was
criticized for being the only country in Southeast Asia still operating a
legal government monopoly. Far more, threatening than the criticism, however,
was the general agreement that all non-medical opium exports should be ended
as soon as possible. Iran had already imposed a temporary ban on opium
production in April 1946, and smuggled supplies from China were trickling to
an end as the People's Republic initiated its successful opium eradication
campaign. Although the Thai monopoly was still able to import sufficient
quantities, the future of foreign imports was not too promising. To meet
their projected needs for raw opium, in in[sic] 1947 the Thai government
authorized poppy cultivation in the northern hills for the first time. The
edict attracted an increasing number of Meo tribespeople into Thailand
opium-growing regions, stimulating a dramatic increase in opium production.
But these gains in local production were soon dwarfed by the even more
substantial increases in the Burmese Shan States. As Iranian and Chinese
opium gradually disappeared in the early 1950s, the KMT filled the void by
forcing an expansion of production in the Shan States, which they occupied.
The KMTwere at war with the Burmese and since their U.S. supplies were sent
through Thailand, Bangkok became a natural entrepot for KMT opium. By 1949
most of the Thai monopoly's opium was from Southeast Asia, and in 1954
British customs in Singapore stated that Bangkok had become the major center
for international opium trafficking in the region. The traffic had become so
lucrative that Thailand quietly abandoned the anti-opium campaign announced
in 1948 (all opium smoking was to have ended by 1953).
The 'opium war' between Phao and Sarit was a hidden one, with almost all the
battles concealed by a clock of official secrecy. The most comical exception
occurred in 1950 as one of General Sarit's army convoys approached the
railhead at Lampang in northern Thailand with a shipment of opium. Phao's
police surrounded the convoy and demanded that the soldiers surrender the
opium since anti-narcotics work was the exclusive responsibility of the
police. When the army men, threatening to shoot its way through to the
railway, the police brought up heavy machine guns and dug in for a
fire-fight. A nervous standoff continued for two days until Phao and Sarit the
mselves arrived in Lampang, took possession of the opium, and jointly
escorted it to Bangkok, where it quietly disappeared.
In the underground struggle for the opium trade, General Phao slowly gained
the upper hand. While the clandestine nature of this 'opium war' makes it
difficult to reconstruct the precise ingredients in Phao's victory, the
critical importance of CIA support cannot be underestimated. In 1951, a CIA
front organization, the Sea Supply Corporation, began delivering lavish
quantities of naval vessels, arms, armored vehicles, and aircraft to General
Phao's police force. With this materiel, Phao was able to establish a police
air force, a maritime police, a police armored division, and a police
paratroop unit. General Sarit's American military advisors repeatedly refused
to grant to his army the large amounts of modem equipment that Sea Supply
Corporation gave Phao's police.
Since Sea Supply shipments to KMT troops in Burma were protected by the Thai
police, Phao's alliance with the CIA also gave him extensive KMT contacts,
through which he was able to build a virtual monopoly on Burmese opium
exports. Phao's new financial and military power quickly tipped the balance
of political power in his favor and in a December 1951 cabinet reshuffle his
clique captured five cabinet slots, while Sarit's fraction got only one.
Within a year, Sarit's rival had taken control of the, government and Phao
was widely recognized as the most powerful man in Thailand.
Phao used his new political power to further strengthen his financial base.
He took over the vice rackets, expropriated the profitable Bangkok
slaughterhouse, rigged the gold exchange, collected protection money from
Bangkok's wealthiest Chinese businessmen, and forced them to appoint him to
the boards of over twenty corporations.
The man who C. L. Sulzberger of the The New York Times called a "superlative
crook" (and whom a respected Thai diplomat hailed as the "worst man in the
whole history of Thailand') became the CIA's most important Thai client. Phao
became Thailand's most ardent anti-Communist, and it appears that his, major
obligation was to further KMT political aims in Thailand and to support its
guerrilla units in Burma. Phao protected supply, shipments to the KMT,
marketed their opium, and performed such miscellaneous services as preventing
Burmese observers from going to the staging areas during the
November-December, 1953 airlifts of supposed KMT soldiers to Taiwan.
By 1955, Phao's National Police Force had become the largest
opium-trafficking syndicate in Thailand and was ultimately involved in every
phase of the narcotics traffic; the level' of corruption was remarkable even
by Thai standards. If the smuggled opium was destined for export, police
border guards escorted the KMT caravans from the Thailand-Burma border to
police warehouses in Chiang Mai. From there police guards brought it to
Bangkok by train or police aircraft. It was then loaded onto civilian coastal
vessels and straightforwardly escorted by maritime police to a mid-ocean
rendezvous with freighters bound for Singapore or Hong Kong.
However, if the opium was needed for the government Opium Monopoly, political
considerations necessitated bizarre theatrics, with police border guards
staging elaborate shoot-outs with the KMT smugglers near the Thai-Burma
frontier. Invariably, the KMT guerrillas would drop the opium and flee, while
the police heroes brought the 'captured' opium to Bangkok and collected a
reward worth one-eighth of the retail value. The opium would subsequently
disappear. Phao himself delighted in posing as the leader in the crusade
against opium smuggling, and he often made hurried, dramatic departures to
the northern frontier, where he personally led his men in these desperate gun
battles with the ruthless smugglers of slow death.
There can be little doubt that CIA support was an invaluable asset to General
Phao in managing the opium traffic. The agency supplied the aircraft, motor
vehicles, and naval vessels that gave Phao the logistic capability to move
opium from the poppy fields to the sea lanes. And his role in protecting Sea
Supply's shipments to the KMT no doubt gave Phao a considerable advantage in
establishing himself as the exclusive exporter of KMT opium.
Given its even greater involvement in the KMT's Shan States opium commerce,
how do we evaluate the CIA's role in the evolution of large-scale opium
trafficking in the Burma-Thailand region? Under the Kennedy administration,
Presidential adviser Walt W. Rostow popularized a doctrine of economic
development which preached that a stagnant, underdeveloped economy could be
jolted into a period of rapid growth, an economic "takeoff," by a massive
injection of foreign aid and capital, capital which could subsequently be
withdrawn as the economy coasted into a period of self-sustaining growth. CIA
support for Phao and the KMT seems to have sparked such a "takeoff' in the
Burma-Thailand opium trade during the 1950s: modem aircraft replaced mules,
naval vessels replaced sampans, and well-trained military organizations
expropriated the traffic from bands of illiterate mountain traders.
Never before had the Shan States encountered smugglers with the discipline,
technology, and ruthlessness of the KMT. Under General Phao's leadership,
Thailand had changed from an opium-consuming nation to emerge as the world's
most important opium distribution center. The Golden Triangle's opium output
approached its present level; Burma's total harvest had increased from less
than forty tons just before World War II to reach three hundred to four
hundred tons in 1962—and then to nearly 2,000 tons today. Thailand's growth
was even more remarkable, from seven tons to over 100 tons.
But was this increase in opium production the result of a conscious decision
by the CIA to support its allies, Phao and the KMT, through the narcotics
traffic? Of one thing there can be no doubt: the CIA knew its allies were
heavily involved in the traffic. Headlines made it known to the whole world.
Phao, clearly a protege of the CIA, was obviously responsible for the censure
that Thailand received from the United Nations Commission on Narcotic Drugs.
And certainly the CIA did nothing to halt the trade or to prevent its aid
from being abused. But whether the CIA actively organized the traffic is
something that only the Agency itself can answer. In any case, by the early
1960s the Golden Triangle had become the largest single opium-growing region
in the world—a vast reservoir able to supply America's lucrative markets.
Today, the Golden Triangle has surplus opium; it still has well-protected,
disciplined syndicates; and it has become America's major heroin supplier.
In Thailand, a hundred years of foreign advisers and twenty-five years of
American advisers have given the government a certain veneer of technical
sophistication but have also inhibited the growth of any internal revolutions
that might have broken with the traditional patterns of corrupted, autocratic
government.
At the base of Thailand's contemporary pyramids of corruption, legions of
functionaries systematically plunder the nation and pass money up the chain
of command to the top, where authoritarian leaders enjoy an opulent lifestyle
reminiscent of the old god-kings. Marshal Sarit, for example, had over a
hundred mistresses, arbitrarily executed criminals at public spectacles, and
died with an estate of over $150 million. Such potentates, able to control
every corrupt functionary in the most remote province, are rarely betrayed
during struggles with other factions. As a result, a single political faction
has usually been able to centralize and monopolize all of Thailand's
narcotics traffic. In contrast, the opium trade in Laos and the Shan States
of Burma reflects a more fragmented and feudal political tradition: each
regional warlord controls the traffic in his own territory.
pps. 70-95
--[cont]--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End
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