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from:
http://www.drugwar.com/neocolonialism.htm
Drug War  - Covert Money, Power & Policy
670 Page Paperback, 350 Illustrations, Sewn Binding, Not Yet Published
<A HREF="http://www.drugwar.com/neocolonialism.htm">http://www.drugwar.com/neo
colonialism.htm</A>
-----
Illustrated Summaries of Much Longer Chapters
Drug War
Covert Money, Power & Policy

Neocolonialism

Coffee prices multiply approximately 3-fold from producer's wholesale to
retail. Heroin multiplies approximately 200-fold from its
Prohibition-inflated wholesale price to retail. Heroin now retails, by
weight, for 10 times the price of gold. That, of course, makes it the basis
of military power in Burma.

Military power is built on money, and, thanks to Prohibition, drug
trafficking is the most profitable business on the planet. As the State
Department itself puts it, in its end-of-year 1996 Enforcement Affairs
report, "In terms of weight and availability, there is currently no commodity
more lucrative than drugs. They are relatively cheap to produce and offer
enormous profit margins that allow the drug trade to generate criminal
revenues on a scale without historical precedent."

As anyone who has grown it knows, pot is as cheap and easy to grow as corn or
squash, and can be mass-produced for a few dollars a pound. A legal pound of
primo pot would retail for about $300. An illegal pound of primo pot now retai
ls for about $3000.

The U.N estimates the global drug trade in the early 1990's to be worth 400
billion untaxed dollars a year. In 1994 Apolinar Biaz-Callejas of the Andean
Commission of Jurists put it at $460 billion. That's about one-tenth of all
global commerce. The legal value of that trade would be about a tenth of that.

Since military power is built on money, and since governments, or at least
relations between governments, are built on military power, the structural
effect of the artificial value has been to create, over the decades, an
unbreakable symbiosis between drug-dealing and covert military intelligence.
Each is the greatest strategic ally of the other. The political effect has
been the institutionalization of global industrial fascism, death-squad
genocide, wherever campesinos threaten to take control of their own land. I
speak of Burma, Guatemala, the Philippines, Argentina, Mexico, Peru, Bolivia,
Paraguay, Indonesia, Malaysia, Afghanistan, Pakistan, Uruguay, Congo,
Liberia, Nigeria - the list is endless.

According to the U.N. Drug Control Program, the biggest heroin and cocaine
trading institutions in the world are the Burmese, Pakistani, Mexican,
Peruvian and Colombian militaries - all armed and trained by U.S. military
intelligence - in the name of the anti-drug effort, of course. Funny how all
that effort never has any strategic effect.

The centers of power controlling the trade in these demanded global
commodities are the same centers of power disseminating the artificial
hysteria necessary for their continued criminalization. That keeps the retail
price a hundred times higher than the legal value and the trade exclusively
in the hands of the muscle.

Another name for the muscle is military intelligence. The $500 billion dollar
drug trade is run by allies we train and arm. Batista was no more an
aberration than Somoza, or Diem, or Ne Win, or Chiang, or the Shah, or
Marcos, or Salazar, or Papadopoulos, or Stroessner, or Mobutu, or Amin, or
Videla, or Noriega, or Cedras, or Samper, or Salinas, or Suharto, or Fujimori.

Guatemala is the archetypal CIA-OPS operation, a real pattern-setter. In
October of 1945 a popular coup led by liberal young army officers finished
the brutal 14-year dictatorship of General Jorge �bico. In March, Dr. Juan
Ar�valo, an idealistic scholar, was elected president with 85% of the vote.
Ar�valo's political hero was Franklin Roosevelt, whose "four freedoms" -
freedom of speech, freedom of religion, freedom from want and freedom from
fear - became the basis of his political program.

The 1951 elections saw Ar�valo replaced by his Defense Minister, 41 year old
Jacobo Arbenz, one of the engineers of the 1944 October Revolution that
brought electoral democracy to Guatemala. Arbenz was elected with the votes
of 63% of an electorate that now included literate women. The problem with
the brilliantly competent Arbenz was that he proceeded to do everything
Ar�valo had so eloquently promised.

Arbenz nationalized nothing except some unused rural land. He left all
businesses in place, but set out to break the most destructive monopolies,
what he called "feudalism," by competing with them, creating a "a national
and independent capitalism."

He began the construction of a government-run hydroelectric facility to
compete with the Fruit-run monopoly and also initiated rural electrification
and telephone service. These were, of course, the same infrastructure
techniques that had been used to build the United States. Private enterprise
built none of our highways, public schools or harbors, and almost all of our
seminal railroads and hydroelectric facilities were publicly financed.

Arbenz then challenged United Fruit's rural slave-labor system, which
dominated 90% of the country's 3 million people, 60% of them Indians, and
most of the rest mestizos, known as ladinos. The 1952 Agrarian Reform Law
aimed mostly at plantations larger than 670 acres, although fincas of over
223 acres were vulnerable if more than a third of the land was unused. Arbenz
confiscated only unused arable land, distributing 1.5 million acres to
100,000 landless families, in 42 acre plots. Arbenz himself, his
extraordinary Salvadoran wife and his Foreign Minister, lost thousands of
acres.

Practicing sweat-equity free-enterprise, Arbenz immediately put the
confiscated land into production by providing government-run support systems,
as Roosevelt had done. He instituted no political repression of any kind in a
mixed economy that was, for the first time, beginning to grow by leaps and
bounds. United Fruit, Ike and the Dulles brothers insisted that this
constituted "Communism in the Caribbean" and "a Russian toehold" in the
hemisphere.

Guatemala, of course, had virtually no relations at all with Russia. The
Communist Party, in fact, had been the only party that remained illegal under
the idealistic libertarian Ar�valo, who insisted that communism was "contrary
to human nature." Arbenz' Revolutionary Action Party legalized the Guatemalan
Workers Party in 1951, and it held 4 of 56 seats in Congress.

Arbenz used Ar�valo's 1947 Labor Code, which was based on Roosevelt's Wagner
Act. It insisted on the right of plantation workers to unionize, strike and
bargain collectively. For the first time in Guatemalan history, the
campesinos had military protection. Arbenz established rural cooperatives,
public schools, public clinics, public buses and local cultural institutions.
Everything Arbenz did, in fact, conformed to John Kennedy's 1961 Alliance for
Progress model.
One of the designers of the Alliance for Progress, Kennedy's Special
Assistant Arthur Schlesinger, wrote in 1946: "All across Latin America the
ancient oligarchies - landholders, Church, and Army - are losing their grip.
There is a groundswell of inarticulate mass dissatisfaction on the part of
peons, Indians, miners, plantation workers, factory hands, classes held down
past all endurance and now approaching a state of revolt."

Like Arbenz, Schlesinger understood that the key to political stability was
economic, so he looked to the inclusive social democratic parties, which
built from the ground up. Kennedy would have given Arbenz all the help he
could, in order, as Schlesinger put it, "to check Peronismo and Communism."
The Dulles brothers, quite literally, chose Peronismo.

Since Arbenz was serious about land reform, he put committed Marxists, whom
he trusted not to sell out, in charge of administering the Agrarian Reform
program. But they were bound by the strictures of the law, and the basis of
that law was sweat-equity free-enterprise. The market that the campesinos
were encouraged to enter was just that, a free market. Arbenz' Agrarian
Reform Program was his idea of a rural Small Business Administration. He was
succeeding in rendering thousands of campesinos economically independent,
creating a genuinely nationalist, capitalist alternative to corporate
colonialism. What the U.S. proceeded to do, however, convinced the 25
year-old Argentine doctor Ch� Guevara, who was part of this, and quite a few
others, that militaristic communism was indeed the only alternative to United
Fruit.

Arbenz seized nearly 400,000 of United Fruit's 550,000 acres, all unused, and
all originally seized from the Indians. He compensated United Fruit in
government bonds based on the company's own radically deflated 1952 book
value, which the company had used to lower its already miniscule land taxes.
The company was enraged, and the company was led by Sam "the Banana Man"
Zemurray, one of the craftiest and most dangerous fighters ever to rise from
the streets of New Orleans.

Zemurray's team included not only his Mafia partners on the New Orleans
docks, led by the deadly Carlos Marcello, but the Boston Brahmin Thomas
Cabot, for a short while a president of United Fruit. Thomas Cabot was the
brother of John Moors Cabot, the Assistant Secretary of State for
Inter-American Affairs. Another major Fruit stockholder was Senator Henry
Cabot Lodge, who violently denounced Ar�valo's unionism from the Senate floor
in 1949.

Both Secretary of State John Foster Dulles and his brother Allen Dulles, CIA
Director since 1953, were major Fruit stockholders. Through their law firm,
Sullivan and Cromwell, they had helped arrange, through Schroeder Banking,
the 1936 United Fruit takeover of Guatemala's rail system, the International
Railways of Central America.

Allen Dulles was a director of the British-based Schroeder Banking Ltd, which
he had turned into a key conduit of CIA funds. United Fruit was, therefore, a
de facto CIA proprietary. When the Dulles brothers engineered the destruction
of the Mossadegh government in Iran in 1953, the largest corporate
beneficiary was the de-nationalized Anglo-Iranian Oil Company, largely
controlled by Schroeder Banking. Like Ar�valo, Mossadegh had in fact refused
to legalize the Communist (Tudeh) Party. Mossadegh's threat was economic
nationalism, not the communism the Dulles brothers had falsely accused him
of. Like Arbenz, Mossadegh was a liberal democrat replaced by a murderous
fascist dope peddler. The results, as we have seen, have not been happy.

Peron's Argentina, Stroessner's Paraguay and Papadopoulos' Greece became
major drug entrep�ts thanks to cooperating German, British, French and
American secret services. During the 1947 civil war in Greece between the
popular leftist coalition that had defeated the Nazis and the British-backed
Royalists, the U.S., using Gehlen's agents, backed IDEA, the Holy Bond of
Greek Officers. These were the fascist elements in the professional army that
had fought with the Nazis during the war. With enough American mat�riel for
15,000 men, Colonel Papadopoulos, a Nazi war criminal, was able to take
control of Greek intelligence, the KYP, and thereby control the Greek
military. In 1967, Papadopoulos took direct control of Greece in a bloody
coup that initiated a period of death squad assassinations for which Greek
democrats have yet to forgive the U.S.
Aside from the "Peronist" Dulles brothers and the high command in the State
Department, Zemurray's United Fruit team included "Tommy the Cork" Corcoran,
one of Roosevelt's original brain trusters. Corcoran represented the Teamster
insurance company, U. S. Life, Chiang Kai-shek's brother-in-law, and the
CIA's proprietary airline, Civil Air Transport, which serviced the Kuomintang
opium armies in Burma.

The KMT's main Bangkok connection, General Phao, the commander of the Thai
police who coordinated CAT air traffic with the KMT, was also the commander
of the Thai government's relationship with the CIA. Explained KMT Gen. Tuan
Shi-wen, "To fight you must have an army, and an army must have guns, and to
buy guns you must have money. In these mountains, the only money is opium."
According to Professor McCoy, to whom Gen. Tuan was speaking, the first
snow-white #4 heroin lab was opened by KMT-affiliated Hong Kong chemists on
the Thai-Burma border in the late 60's. The KMT are also known, fittingly, as
the "White Chinese."

The KMT's lawyer, "Tommy the Cork" Corcoran, was also United Fruit's lawyer.
Corcoran was intimate with the entire leadership of the CIA, which he had
helped to organize, and which was, in any case, extremely sympathetic to
United Fruit. Walter Bedell Smith, Gen. Eisenhower's wartime chief of staff
and Truman's CIA director, was now John Foster Dulles' Undersecretary of
State. In 1953 he had asked Corcoran for the presidency of United Fruit, and
in 1955 was named to its board of directors. Gen. Robert Cutler, chairman of
the National Security Council, already sat on the United Fruit board. Robert
Hill, ambassador to Costa Rica, got to the UF board in 1960. Hill was
connected to Grace Shipping, another CIA friend heavily invested in
Guatemala.

Sam "the Banana Man" Zemurray's team also included Edward Bernays, the
formidable "father of public relations," who filled the American media with
phony reportage about "communism in Guatemala." The right-wing John Clements,
a Hearst vice-president with his own major magazines and PR firm, did the
same. Once the "demographics" had been taken care of, Eisenhower and the
Dulles brothers had the support of every Democrat in Congress. With
Nicaragua's Somoza, the Dominican Republic's Trujillo and Cuba's Batista
champing at the bit, Operation Success began in early June of 1954.

With control of the air, the sea and all the neighboring countries, Allen
Dulles' CIA had no trouble overwhelming Jacobo Arbenz with a military and
propaganda campaign coordinated from both inside and outside the country.
Aerial bombardment of the presidential palace was combined with a mercenary
ground force of about 180 men, led by Guatemalan Col. Castillo Armas, the
size and popularity of which was wildly exaggerated by well placed Radio
Liberty transmitters.
In 1957 the intrepid Mafia point-man and Batista operative, Johnny Rosselli,
made another trip to Guatemala City, as he had done many times throughout
1956. This time the trip was in reaction to Castillo's jailing of his
partner, casino operator Ted Lewin. Castillo was promptly gunned down, and
Col. Enrique Trinidad Oliva, Johnny Rosselli's gambling and narcotics
partner, became the new head of Guatemala's secret police.

Col. Trinidad Oliva was also the key CIA contact in the Guatemalan
government, working under his half-brother, the defense minister. Trinidad
Oliva coordinated all "foreign aid" coming through the CIA conduit ICA, the
International Cooperation Administration, the forerunner of the Agency for
International Development, AID.

Rosselli and Trinidad then helped the murderous old Gen. Miguel Yd�goras
Fuentes, one of �bico's assassins with close ties to mob partner Trujillo, to
become head of state. Mario Sandoval Alarc�n. "the father of Latin America's
death squads," organized the right-wing of Castillo's party into the National
Liberation Movement  and hired himself out to Trinidad and Rosselli.

The same year that Johnny Rosselli helped the CIA engineer the change in the
Guatemalan government, he was asked by his Syndicate associates to put
together Giancana in Chicago, Costello in New York, Lansky in Miami, and
Marcello in New Orleans for the huge $50 million Tropicana construction
project in Las Vegas. According to Fred Black, a political fixer who was
close to Rosselli, Bobby Baker and Lyndon Johnson, Rosselli's influence was
such that he gave orders to the Dorfmans, who controlled the Teamsters' huge
Central States Pension Fund. During the 50's and 60's, it was Johnny Rosselli
who "set up protection" in Las Vegas.

Throughout 1956 and 57 Rosselli travelled back and forth from Mexico City,
the planning center for all CIA operations in Latin America, and Guatemala
City. An experienced ICA operative noted that "John had access to everyone
and everything that was going on there. He had an open door at the embassy in
Guatemala, and in Costa Rica. He was in there plenty of times. I know because
I saw him. He supplied information to the government, and had a hand in a lot
of the intrigues that were going on."

This means, operationally, that Johnny Rosselli's interests became the CIA's
interests. "Throughout Latin America," notes Frank McNeil, a junior political
officer in the Guatemalan Embassy in 1960, "there were two American
governments - one intelligence and one official." McNeil's boss, Ambassador
John Muccio, learned of the Bay of Pigs invasion force being trained in
Guatemala only after the story broke in The New York Times. As John Kennedy
found out to his chagrin, Rosselli, his Syndicate and Batistiano allies, had
more operational clout than the State Department.
-----
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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