THE HEROIN TRAFFIC IN SOUTHEAST ASIA ABSTRACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00415R000400050035-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: November 15, 2006
• Sequence Number: 35
• Publication Date: June 2, 1972
• Content Type: STATEMENT

'D14c,5 Pepproved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
FOR RELEASE FRIDAY, JUNE 2, 1972 PM NEWSPAPERS
Testimony to be delivered before Senator Proxmire's
Subcommittee at 2:30 pm, Friday, June 2 in 1224 New
Senate Office Building..
Statement by Alfred W. McCoy
before the Foreign Operations Subcomittee
of the Appropriations Committee, U.S. Senate
June 2, 1972
THE HEROIN TRAFFIC IN SOUTHEAST ASIA
Abstract
1.
Much of the heroin entering the U.S. now originates in Southeast Asia.
2.
The governments of South Vietnam, Laos, and Thailand are actively
engaged in the heroin traffic.
3.
The U.S. government is aware of this traffic, but has not moved to
it and has consciously concealed evidence of the involvement of
stop
our
Southeast Asian.allies.
Alfred W. McCoy is presently a Ph.D. student in Southeast Asian History
at Yale University. He has spefit the last 18 months researching the inter-
national drug traffic and his findings will be published in a book entitled
The Politics of Heroin in Southeast Asia, Harper $ Row, July 1972. Mr. McCoy's
findings are based on researc't, documents, and more than 250 personal inter-
views cond'.icted in the U.S., Europe, and Southeast Asia. Sdurces of information
include U.S. military, intelligence, and Embassy reports on narcotics, as well
as interviews with U.S. Embassy, USAID, military, and CIA personnel. Mr. McCoy
.also interviewed the Chief of the Narcotics Bureau of the Vietnamese National
Police, Vietnamese intelligence, military, and customs officials, Gen. Ouane
Rattikone (former Chief of Staff of the Royal Laotian Army), Touby Lyfoung (a
Laotian Meo leader), U Ba Thien (former commander-in-chief of the Shan National
Army in Burma), an officer of the KMT (Nationalist Chinese) irregular army in
Thailand, and other persons in South Vietnam, Laos, Thailand, Hong Kong and
Singapore. Mr. McCoy spent a week living with an opium growing Meo tribe in
Laos. He has briefed the U.S. Bureau of Narcotics and Dangerous Drugs on his
findings, and they corroborate much of his evidence. Mr. McCoy can be contacted
at [phone].
John Marx
Office of Senator Clifford Case
225-3224
Wes Michaelson
Office of Senator Mark Hatfield
225-8310
Bill Broyderick
Office of Cong. Les Aspin
225-3031
?v1 D!C:-
Approved For Release 2006/11/15: CIA-RDP74BOO415ROO0400050035-1
 Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
THE HEROIN TRAFFIC IN SO[TDIEAST ASIA
Statement by Alfred N. McCoy
By ignoring, covering up, and failing to counteract the massive drug
traffic from Southeast Asia, our government is aiding and abetting the influx
of heroin, into our nation.
Southeast Asia is fast becoming the major supplier of illicit narcotics
for America's growing population of heroin addicts. Since the late 1960s
international criminal syndicates have responded to mounting law enforcement
efforts in Europe and the Middle East by shifting their major sources of supply
to Southeast Asia. The opium poppy fields of Southeast Asia's Golden Triangle
Region supply raw materials for clandestine heroin laboratories in Europe,
Hong Kong, and the Tri-border area where Burma, Thailand and Laos converge.
High government officials in Thailand, Laos and South Vietnam are actively
engaged in the heroin traffic and are protecting the region's powerful narcotics
syndicates.` Because the corruption in these countries is so systematic and
the narcotics traffic so lucrative, our political commitments to these govern-
ments inhibit and prevent any effective action to cut the flow of these
illicit narcotics into the United States.
U.S. diplomatic, military, and intelligence officials hove always toler-
ated governmental corruption in Southeast Asia, and narcotics trafficking has
not been treated differently. U.S. officials in Southeast Asia have been impli-
cated in the traffic on three levels: 1) providing political and military support
for officials and political factions actively engaged in the drug traffic without
pressuring them to deal with the problem; 2) consciously concealing evidence of
involvement in the narcotics traffic by our Southeast Asian allies. Whenever
the U.S. Congress or the media have made accurate allegations about the involve-
ment of our allies, U.S. diplomatic personnel have repeatedly issued categorical,
fallacious denials; 3) active involvement in certain aspects of the region's
narcotics traffic.
In 1967-68 American diplomatic initiatives convinced the Turkish government
to drastically reduce its total opium production and expand its enforcement
efforts. Significantly, the sharp reduction of Turkey's opium production from
1968-72 coincided with a massive increase in the amount of heroin enter-
ing the United States; between 1969 and 1972 America's estimated addict population
practically doubled, increasing from 31S,000 to 560,000. As late as 1965 a seizure
Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
 Of e,z1 Approved OS 0 For Repleaese.2006/11T 15cIuCIA1RDP74BOO415R00040Q050035-1 City; by
1971 seizures totalling almost 4000 kilos within a period of several weeks did
not have even a minor impact on the street supply. The question is, of course,
where is all this heroin coming from,
Fnformed Federal narcotics officials and diplomats are virtually unanimous
in their response--more and more heroin comes from Southeast Asia.
Beginning in 1965 members of the Florida-based Trafficante family of
American organized crime began appearing in Southeast Asia. Santo Trafficante,
Jr.,heir to the international criminal syndicate established by Lucky Luciano
and Meyer Lansky, traveled to Saigon and Hong Kong himself in 1968. U.S. Embassy
sources state that Trafficante met with prominent members of Saigon's Corsican
syndicates. These syndicates have been regularly supplying the international
narcotics markets since the First Indochina War.
In 1967-68 there was evidence of increased activity on the part of Indochina's
Corsican gangsters: U.S. agents observed Corsican heroin traffickers conunuting
between Saigon and Marseille where the Corsicans control. the clandestine heroin
laboratories. A former, high ranking CIA agent in Saigon told me in an interview
that in 1969 there was a summit meeting of Corsican criminals from Marseille,
Vientiane, and. Phnom Penh at Saigon's Continental Palace Hotel.
In the wake of these high level meetings, increased quantities of Asian
heroin have begun entering the United States. In 1970 the U.S. Bureau of Narcotics
broke up a Filipino courier ring which had smuggled over 1,000 kilos of pure
Hong Kong heroin into the United States in the preceding 12 months. 1,000
kilos of pure heroin is equivalent to 10. to 20% of our estimated total annual
heroin consumption. Since all of Hong Kong's morphine base comes from Southeast
Asia's Golden Triangle, this case provided ample evidence of the growing import-
ance of Southeast Asia in America's drug crisis. Unfortunately, the U.S. Bureau
of Narcotics has only one agent in Hong Kong and so further seizures have not
been forthcoming. In 1971 French Customs seized 60 kilos of pure Laotian heroin
at Orly Airport in Paris in the suitcases of Prince Sopsaisana, the newly appointed
Laotian Ambassador to France. The U.S. Bureau of Narcotics and diplomatic sources
in Vientiane report that the Ambassador's French connection was arranged by Michel-
Theodas, manager of the Lang Xang Hotel in Vientiane and a high ranking member
of the French-Corsican underworld. Finally, the Director of the U.S. Bureau of
Narcotics reports that his intelligence sources indicate that much of the massive
Approved For Release 2006/11/15: CIA-RDP74BOO415ROO0400050035-1
 Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
flow of heroin moving through Latin America an its way to the United States
is coming from Southeast Asia. Ironically, our Southeast Asian allies are prof-
iting from this heroin bonanza. In a three hour interview with me, Gen. Duane
Rattikone, former chief-of-staff of the Royal Laotian Army, admitted that he
controlled the opium traffic in northwestern Laos since 1962. Gen. Duane also
controlled the largest heroin laboratory in Laos. This laboratory produced a
high grade of heroin for the GI market in South Vietnam, and, according to the
CIA, was capable of producing over 3,000 kilos of heroin a year. With the with-
drawal of U.S. troops, the market for such heroin.has shifted directly to the
United States. Most of the opium traffic in northeastern Laos is controlled by
Vang Pao, the Laotian general who commands the CIA's mercenary army. The Thai
government allows Burmese rebels, Nationalist Chinese irregulars, and mercenary
armies to move enormous mule caravans loaded with hundreds of tons of Burmese
opium across Thailand's northern border. U.S. narcotics agents working in
Thailand claim that every major narcotics dealer in Thailand has a high ranking
"advisor" on the Thai police force. In South Vietnam, the opium and heroin
traffic is divided among the natign's three dominant military factions: President
Thi.eu's political apparatus, PrimeMinister Khiem's political organization,
and General Ky's political apparatus.
An examination of Gen. Ky's political apparatus demonstrates the importance
of official corruption in Southeast Asia's drug traffic and shows how Southeast
Asia's narcotics move from the poppy fields into the international smuggling
circuits. Located in the Vientiane region of Laos until recently was a large
heroin laboratory managed by an overseas Chinese racketeer named Huu Tim Heng.
Mr. Hong was the silent partner in Pepsi Cola's Vientiane bottling plant and used
this operation as a cover to import acetic anhydride, a chemical necessary for
the manufacture of heroin. Mr. Heng purchased raw opium and morphine base from
Can, Ouane Rattikone, and then sold the finished product to Gen. Ky's sister,
Mrs. Nguyen.Thi Ly. Although a resident of Pakse, Laos from 1962-1967, Mrs. Ly
now lives in Saigon and travels to Vientiane about once a month to arrange for
shipment of the packaged heroin to Pakse or Phnom Penh, Cambodia where it is picked
up by transport aircraft belonging to the Vietnamese Fifth Air Division and flown
to Saigon. The commander of the Fifth Air Division, Col. Phan Phung Tien, has
been publicly attacked by the Director General of Vietnam Customs for his inter-
ference in anti-narcotics efforts and is believed to have extensive contacts with
Saigon's Corsican underworld. Vietnamese military officers have identified Col.
Approved For Release 2006/11/15: CIA- RDlP74B0O415ROOO-400O50035=1J - --
 Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
Tien as Gen. Ky's strongest political supporter inside the Air Force, and
one senior U.S. Air Force advisor called him Gen. Ky's "revolutionary plotter."
There is overwhelming evidence of systematic corruption extending all
the way to the top of Preside nt TI;leu's political apparatus. Two of his staunch-
est supporters in the Lower House of the National Assembly have been arrested
trying to smuggle heroin into South Vietnams, and other pro-Thieu deputies,
including one of the president's legislative advisors have been implicated in
other smuggling cases. Some of Pres. Thieu's closest supporters inside the
Vietnamese Army control the distribution and sale of heroin to American GIs
fighting in Indochina. President Thieu's most important military advisor, Gen.
Dang Van Quang, has been publicly accused by NBC of being the "biggest pusher"
in South Vietnam. It is a 'matter of public record that Gen. Quang was
removed from command of IV Corps for outrageous corruption in 1967-68, and
reliable sources in the Vietnamese military have confirmed NBC's report.
Finally, U.S. military commanders report that the narcotics traffic in the Mekong
Delta is controlled by colonels and low ranking generals loyal to Can. Quang.
Another of President Thieu's staunch Army supporters, Gen. Ngo Dzu, II Corps
Commander until several weeks ago when he was removed for military incompetence,
has been identified as one of the major drug traffickers in Central Vietnam
by the USAID Public Safety Directorate, U.S. Bureau of Narcotics and Dangerous
Drugs, and the U.S. Army Criminal Investigation Division.
American officials serving in Southeast Asia have a great deal of responsi-
bility for the growth of the region's illicit drug traffic. American diplomats
and intelligence agents have allied themselves with corrupt, indigenous groups
without pressuring them to get out of the drug business. Throughout the moun-
tainous Golden Triangle region, the CIA has provided substantial military support
for mercenaries, right-wing rebels, and tribal warlords who are actively engaged
in the narcotics traffic. And in Thailand the CIA has worked closely with
nationalist Chines: paramilitary units which control 80-90% of northern Burma's
vast. opium exports and manufacture high grade heroin for export to the American
market,
U.S. Embassies in Indochina have repeatedly tried to cover-up the involve-
ment of our local allies in the drug traffic. In 1968 Son. Gruening came forward
with well-founded allegations about Gen. Ky's opium smuggling activities. The
U.S. Troikas sy in Saigon issued a categorical denial. In July 1971, NBC's senior
Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
 Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
Saigon correspondent charged that Gen. Ding Van Quang, Pres. Thieu's chief mili-
tary advisor, was the "biggest pusher" in South Vietnam. Prior to this broad-
cast, I had received independent reports of Gen. Quang's narcotics dealings
from high. ranking Vietnamese sources. The U.S. Embassy again issued a vigorous
denial. In July 1971, Congressman Robert Steele claimed to have received clas-
sified documents showing that 11 Corps Commander, Gen. Ngo Dzu, was trafficking
in heroin.. The U.S. Embassy deferred to Senior II Corps Advisor John Paul Vann
who denied that such documents existed. I have one of those documents in my
possession.
The record of the U.S. Embassy in Laos is even worse. All U.S. officials
in Indochina know that the vast majority of the high grade heroin sold to GIs
fighting in South Vietnam is manufactured in Laotian laboratories. Yet in December
1970, the U.S. Ambassador to Laos, G. McMurtrie Godley, told an American writer,
"I believe the Royal Laotian Government takes its responsibility seriously to
prohibit international opium traffic." Ambassador Godley did his best to prevent
the assignment of U.S. Bureau of Narcotics agents to Laos. It was not until
November 1971--a full two years after Laotian heroin had decimated U.S. troops
in South Vietnam--that the Bureau of Narcotics was allowed to send its agents
Finally, U.S. agencies have been actually involved in certain aspects of
the region's drug traffic. In northern Laos, Air America aircraft and helicopters.
chartered by the U.S. Central Intelligence Agency and USAID have been transporting
opium harvested by the agency's tribal mercenaries on a regular basis.
After spending 18 months researching, travelling and conducting hundreds
of interviews, I have reached one firm conclusion--if we are going to deal seri-
ously with the heroin problem in this country we will have to reorder our pri-
or:iti.es and commitments in Southeast Asia. President Nixon has told us that we
cannot solve the drug problem unless we deal with it at its source and eliminate
illicit opium production. The source is now Southeast Asia, and that area accounts
for some 70o of the world's illicit opium supply. There is enough opium in
Southeast Asia to fuel our heroin plague for countless generations to come. In
the past and present we have let our military and political goals in Southeast Asia
dictate our priorities. As a result, our officials have tried to prop up corrupt
regimes there at all costs, including silent acquiesence to the traffic in drugs
that is ruining the fabric of our nation. the problem of crime in our streets is
largely a heroin problem which would disappear if the drug traffic were brought
Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1
 Approved For Release 2006/11/15: CIA-RDP74BO0415R-00040005003f-1
under control. The drugs now flowing 'from Southeast Asia in effect make all
the funds and effort expended reducing Turkey's opium production totally
irrelevant as a. final solution to our problem.
We now have to decide which is more important to our country--propping
up corrupt governments in Southeast Asia or getting heroin out of our high
schools.
Approved For Release 2006/11/15: CIA-RDP74B00415R000400050035-1